Most successful businesses have one thing in common: money. It allows management to implement new strategies, make acquisitions, and employ innovation. With this mindset, we searched for industrial stocks with substantial cash reserves and are projected to grow. Liquidity is an especially helpful trait when a company is focused on growth. Those cash reserves can provide funding to turn the projections into reality. If stocks of this nature interest you, then you will like our list below.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a quick ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able the company is to meet current obligations using liquid assets).
We first looked for industrial stocks. We then screened for businesses that have expected earnings per share growth of more than 25 percent for next year (1-year projected EPS Growth Rate>25%). We next screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps.
Do you think these stocks are worth more than the market currently says? Please use our list to assist with your own analysis.
1) PGT, Inc. (PGTI)
|Industry||General Building Materials|
|1-Year Projected Earnings Per Share Growth Rate||115.38%|
PGT, Inc. engages in the manufacture and supply of residential impact-resistant windows and doors. The company offers impact-resistant products, including heavy-duty aluminum or vinyl frames with laminated glass to provide protection from hurricane-force winds and wind-borne debris. It also provides a range of non-impact-resistant aluminum and vinyl frame windows and doors; Architectural Systems line of products, which offer protection from hurricane-force winds and wind-borne debris for mid-and high-rise buildings; and non-glass vertical and horizontal sliding panels for porch enclosures, such as vinyl-glazed and aluminum-framed products used for enclosing screened-in porches that provide protection from inclement weather. The company markets its products under the WinGuard, PremierVue, PGT Architectural Systems, Eze-Breeze, and SpectraGuard brand names. PGT, Inc. offers its products to residential new construction, and home repair and remodeling end markets through window distributors, building supply distributors, window replacement dealers, and enclosure contractors. It operates in the southeastern United States, the Gulf Coast, Coastal mid-Atlantic, the Caribbean, Central America, and Canada. The company was formerly known as JLL Window Holdings, Inc. and changed its name to PGT, Inc. in January 2004. PGT, Inc. was founded in 1980 and is based in North Venice, Florida.
2) Fuel-Tech, Inc. (FTEK)
|Industry||Pollution & Treatment Controls|
|1-Year Projected Earnings Per Share Growth Rate||100.00%|
Fuel Tech, Inc. provides engineered solutions for the optimization of combustion systems in utility and industrial applications worldwide. The company offers air pollution control technologies, such as low and ultra low nitrogen oxide (NOx) burners, over-fire air systems, NOxOUT and HERT selective non-catalytic reduction systems, and advanced selective catalytic reduction systems to reduce NOx emissions in flue gas from boilers, incinerators, furnaces, and other stationary combustion sources. It also provides ULTRA technology, which converts urea-to-ammonia on site offering safe reagent for use in selective catalytic reduction systems; and flue gas conditioning systems that are chemical injection systems used to enhance electrostatic precipitator and fabric filter performance in controlling particulate emissions. In addition, the company offers FUEL CHEM technologies, which control slagging, fouling, corrosion, opacity, and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using Targeted In-Furnace Injection technology. Fuel Tech, Inc. offers its FUEL CHEM program for plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, university, and district heating markets, as well as to the owners of boilers, furnaces, and other combustion units. The company sells its products through its direct sales force and agents. Fuel Tech, Inc. was founded in 1987 and is headquartered in Warrenville, Illinois.
3) PMFG, Inc. (PMFG)
|1-Year Projected Earnings Per Share Growth Rate||107.14%|
PMFG, Inc., through its subsidiaries, provides custom-engineered systems and products primarily to power generation, natural gas infrastructure, and refining and petrochemical processing markets worldwide. The company operates through two segments, Process Products and Environmental Systems. The Process Products segment offers separation and filtration systems and products that improve efficiency, reduce maintenance, and extend the life of energy infrastructure by removing liquid and solid contaminants from gases or liquids, as well as by separating different liquids. This segment's separation and filtration systems include vane separators, centrifugal separators, filter separators, three-phase separators, absolute separators, fuel gas conditioning systems, gas filters, nuclear plant steam separators, inlet air treatment systems, pulsation dampeners, heat exchangers, and industrial silencers. The Environmental Systems segment engages in designing, engineering, fabricating, and selling environmental control systems and products for air and noise pollution abatement. This segment offers selective catalytic reduction systems that convert NOx emissions produced by burning hydrocarbon and organic fuels, such as coal, gasoline, natural gas, wood, grass, and grain into nitrogen and water vapor; and oxidation systems, which oxidize carbon monoxide and various volatile organic compounds into carbon dioxide and water without the use of additional chemical reagents. The company markets its products primarily through independent representatives, as well as directly to customers. PMFG, Inc. was founded in 1933 and is based in Dallas, Texas.
4) Great Lakes Dredge & Dock Corporation (GLDD)
|1-Year Projected Earnings Per Share Growth Rate||71.43%|
Great Lakes Dredge & Dock Corporation engages in the business of marine construction, primarily dredging, and commercial and industrial demolition primarily in the east, west, and Gulf Coasts of the United States. The company's Dredging segment is involved in capital dredging projects consisting of primarily port expansion projects, land reclamations, trench digging for pipelines, tunnels and cables, and other dredging related to the construction of breakwaters, jetties, and canals; beach nourishment projects, which involve moving sand from the ocean floor to shoreline locations; and maintenance dredging that includes the re-dredging of previously deepened waterways and harbors to remove silt, sand, and other accumulated sediments, as well as lake and river dredging, inland levee and construction dredging, environmental restoration, and habitat improvement. Its Demolition segment provides commercial and industrial demolition services. It is involved in exterior demolition that comprises dismantling and demolition of structures and foundations; and interior demolition, which includes removing specific structures within a building. This segment also engages in site development, removal of asbestos and other hazardous materials, and remediation of contaminated demolition materials. The company serves federal, state, and local governments; foreign governments; domestic and foreign private concerns, such as utilities and oil companies; general contractors; corporations that commission projects; nonprofit institutions, such as universities and hospitals; and local government and municipal agencies. It has a fleet of 33 dredges, including 8 deployed internationally; 19 material transportation barges; 2 drill boats; and various other specialized support vessels. The company was formerly known as Lydon & Drews Partnership and changed its name to Great Lakes Dredge & Dock Corporation in 1905. The company was founded in 1809 and is headquartered in Oak Brook, Illinois.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/24/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.