Even when a company is fiscally prudent and highly efficient, funding is still essential to keep the momentum building. Along these lines, we put together two traits that pair well to breed growth: significant cash reserves and strong growth projections. When a company has a solid level of liquidity, it adds credibility to the estimated rates of expansion. Cash reserves further signify that there is a general understanding of the importance of fiscal constraints and reserves for the long term health of the company. For our scan today, we looked specifically in the mid cap sector to find liquid companies with projected EPS growth rates above 25 for the next year. See the information below to learn more about these mid cap stocks. We think you will be intrigued by what we found.
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 to meet current obligations using liquid assets).
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.
We first looked for mid cap stocks. We then looked for companies that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We then looked for businesses with projected high growth, measured by 1-Year Projected EPS Growth above 25%. We did not screen out any sectors.
Do you think these mid cap stocks have a positive future in store? Use this list as a starting point for your own analysis.
1) National Instruments Corporation (NATI)
|Industry||Technical & System Software|
|1-Year Projected Earnings Per Share Growth Rate||31.71%|
National Instruments Corporation designs, manufactures, and sells measurement and automation products to create virtual instrumentation systems for general, commercial, industrial, and scientific applications worldwide. The company sells or licenses application software and modular hardware that combines with industry-standard computers, networks, and third party devices to create measurement, automation, and embedded systems. Its system design software products include LabVIEW to design custom virtual instruments for scientists and engineers and provide data analysis, visualization, and sharing features; LabVIEW Real-Time and LabVIEW FPGA, which are modular software add-ons enabling users to configure their application programs and to build custom hardware devices for measurement or control protocols.
The company also offers the LabWindows/CVI programming environment for creating test and control applications; and Measurement Studio, which consists of measurement and automation add-on libraries and additional tools for programmers. Its application software products include NI TestStand, a test management environment; NI VeriStand, a ready-to-use software environment; NI DIAdem, which offers configuration-based technical data management, analysis, and report generation tools; and NI Multisim, which offers circuit design technology. In addition, the company provides hardware products and related driver software, including data acquisition hardware/driver software, PXI modular instrumentation platform, modular instruments, machine vision/image acquisition, motion control, NI RIO hardware platform, industrial communications interfaces, GPIB interfaces/driver software, and VXI controllers/driver software. Further, it offers system configuration and deployment, calibration, warranty and repair, and customer training services, as well as software maintenance and technical support. National Instruments Corporation was founded in 1976 and is headquartered in Austin, Texas.
2) Martin Marietta Materials, Inc. (MLM)
|Industry||General Building Materials|
|1-Year Projected Earnings Per Share Growth Rate||39.47%|
Martin Marietta Materials, Inc., together with its subsidiaries, engages in the production and sale of aggregates for the construction industry primarily in the United States, Canada, the Bahamas, and the Caribbean Islands. It mines, processes, and sells granite, limestone, sand, gravel, and other aggregate products for use in the public infrastructure, and nonresidential and residential construction industries, as well as in the agriculture, railroad ballast, chemical, and other applications. The company also offers asphalt, ready mixed concrete, and road paving materials. In addition, it manufactures and markets magnesia-based chemical products for the industrial, agricultural, and environmental applications; and dolomitic lime primarily for use in the steel industry. These chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. Martin Marietta Materials, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.
3) Cytec Industries Inc. (CYT)
|1-Year Projected Earnings Per Share Growth Rate||69.79%|
Cytec Industries Inc., a specialty chemicals and materials company, engages in developing, manufacturing, and selling chemical products primarily for aerospace composites, structural adhesives, automotive and industrial coatings, electronics, inks, mining, and plastics markets. It operates in four segments: Engineered Materials, In-Process Separation, Additive Technologies, and Coating Resins. The Engineered Materials segment offers aerospace-qualified and industrial-grade prepregs, resin infusion systems, structural/surfacing adhesives, pressure sensitive adhesives, and formulated resins, and carbon fiber reinforcements. The In-Process Separation segment provides mining chemicals, including flotation promoters, collectors, frothers, dispersants and depressants, solvent extractants, flocculants, filter and dewatering aids, antiscalants, and defoamers; and phosphines comprising flame retardants, catalyst ligands, high purity phosphine gas, and biocides.
The Additive Technologies segment offers polymer additives, such as ultraviolet light stabilizers and absorbers, high performance antioxidants, and antistatic agents; and specialty additives, including surfactants, specialty monomers, resin amines, and PTZ Phenothiazine (acrylic acid stabilizers). The Coating Resins segment provides specialty coating resins comprising coating additives and waterborne resins; conventional and ultraviolet curable powder coating resins; and industrial coating resins, such as solventborne resins, amino cross-linkers, monomers, and urethane resins. The company sells its products and services directly, as well as through distributors primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Cytec Industries Inc. has a strategic collaboration with Jaguar Land Rover to develop the use of composites materials for automotive structures. The company was founded in 1993 and is headquartered in Woodland Park, New Jersey.
4) Lam Research Corporation (LRCX)
|Industry||Semiconductor Equipment & Materials|
|1-Year Projected Earnings Per Share Growth Rate||66.14%|
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company provides etch products that remove portions of various films from the wafer in the creation of semiconductor devices. Its etch products include dielectric etch, conductor etch, three-dimensional integrated circuit etch, MEMS devices, CMOS image sensors, and power devices for etching process. The company also offers deposition systems that use chemical vapor deposition, physical vapor deposition, and electrochemical deposition processes to form transistor, capacitor, and interconnect layers in an integrated circuit; and photoresist strip products to remove photoresist from a wafer's surface after the photolithographic circuitry patterning process to remove any film residues and particles before proceeding with the next deposition step in the manufacturing process.
In addition, it provides single-wafer wet clean and plasma-based bevel clean systems for use in wafer cleaning steps, such as post-etch and post-strip cleans, and pre-diffusion and pre-deposition cleans; and a suite of deposition, strip, and polishing/grinding process equipment solutions for LED manufacturing, primarily for substrates of sapphire, silicon carbide, silicon, gallium arsenide, and gallium nitride. The company offers its products to semiconductor manufacturers in North America, Korea, Taiwan, Japan, the Asia Pacific, and Europe. Lam Research Corporation was founded in 1980 and is headquartered in Fremont, California.
5) Cameco Corp. (CCJ)
|Industry||Industrial Metals & Minerals|
|1-Year Projected Earnings Per Share Growth Rate||46.20%|
Cameco Corporation operates as a uranium producer, supplier of conversion services, and fuel manufacturer. The company's Uranium segment is involved in the exploration for, mining, milling, purchase, and sale of uranium concentrate. Its operating uranium properties include the McArthur River and Key Lake, and Rabbit Lake located in Saskatchewan, Canada; the Crow Butte located in Nebraska and the Smith Ranch-Highland located in Wyoming; and the Inkai uranium deposit located in Kazakhstan. Cameco Corporation's Fuel Services segment engages in the refining, conversion, and fabrication of uranium concentrate; and the purchase and sale of conversion services. Its products include uranium trioxide, uranium hexafluoride, and uranium dioxide. This segment also manufactures fuel bundles, reactor components, and monitoring equipment to Candu reactors; and provides nuclear fuel and consulting services to Candu operators. The company's Electricity segment engages in the generation and sale of nuclear electricity through its 31.6% interest in Bruce Power L.P. This segment operates four nuclear reactors at the Bruce B generating station in southern Ontario, Canada. The company was founded in 1987 and is headquartered in Saskatoon, Canada.
6) 3D Systems Corp. (DDD)
|1-Year Projected Earnings Per Share Growth Rate||30.19%|
3D Systems Corporation, through its subsidiaries, engages in the design, development, manufacture, marketing, and servicing of 3D printers and related products, print materials, and services. The company's principle print engines consist of stereolithography, selective laser sintering, multi-jet modeling, film transfer imaging, selective laser melting, and plastic jet printers. Its 3D printers convert data input from computer-aided design software or 3D scanning and sculpting devices to produce physical objects from engineered plastic, metal, and composite print materials. The company also blends, markets, sells, and distributes various consumables, engineered plastics, metal materials, and composites; and offers various software tools, as well as pre-sale and post-sale services, including applications development, installation, warranty, and maintenance. In addition, it provides custom parts services, such as precision plastic and metal parts service and assembly capabilities.
The company markets its stereolithography materials under the Accura and RenShape; laser sintering materials under the DuraForm, CastForm, and LaserForm; and materials for professional printers under the VisiJet brands. It primarily serves manufacturers of automotive, aerospace, computer, electronic, defense, education, consumer, energy and healthcare products, as well as original equipment manufacturers, government agencies, universities, and independent service bureaus. The company sells its products and services through its direct sales organization, sales agents, resellers, and distributors primarily in the United States, Europe, and the Asia-Pacific region. 3D Systems Corporation was founded in 1986 and is headquartered in Rock Hill, South Carolina.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/15/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.