A person with bulging muscles presents an intimidating and impressive physique. But if that individual focuses solely on building strength and ignores activities that promote flexibility, it can lead to long-term short comings that hinder mobility. The same can be true for investments. Investors want companies that have the dual assets of strength and flexibility, which unites the best of both worlds. To find stocks of this nature, we began our scan today at the large-cap level to find companies that have a reservoir of cash and are predicted for significant growth in the coming year. Cash reserves exemplify the strength and flexibility that serves a company very well during a growth phase. If needed, those funds can be accessed to assist in stretching out in new directions or covering any unforeseen expenses. We think you will find the list of large-cap stocks below worthy of a deeper analysis.
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 to meet current obligations using liquid assets).
We first looked for large-cap stocks. From here, we then looked for companies 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 a substantial amount of cash on hand (Current Ratio>2) (Quick Ratio>2). We did not screen out any sectors.
Do you think these large-cap stocks have strong enough fundamentals to move higher? Please use our list to assist with your own analysis.
1) Regeneron Pharmaceuticals, Inc. (REGN)
|1-Year Projected Earnings Per Share Growth Rate||53.99%|
Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of serious medical conditions in the United States. The company's commercial products include EYLEA (aflibercept) Injection for the treatment of neovascular age-related macular degeneration; and ARCALYST (rilonacept) injection for subcutaneous use for the treatment of cryopyrin-associated periodic syndromes, including familial cold auto-inflammatory syndrome and muckle-wells syndrome in adults and children. Regeneron Pharmaceuticals, Inc. was founded in 1988 and its headquarters is in Tarrytown, New York.
2) Yamana Gold, Inc. (AUY)
|1-Year Projected Earnings Per Share Growth Rate||46.46%|
Yamana Gold Inc. engages in the exploration, development, and production of mineral properties, primarily gold. It also explores for copper, molybdenum, zinc, and silver metals. The company's property portfolio includes seven operating gold mines, including Chapada mine, Jacobina mining complex, and Fazenda Brasileiro mine in Brazil; El Pen mine and Minera Florida mine in Chile; Gualcamayo mine in Argentina; and Mercedes mine in Mexico. Yamana Gold Inc. was founded in 2003 and its headquarters is in Toronto, Canada.
3) Edwards Lifesciences Corp. (EW)
|Industry||Medical Appliances & Equipment|
|1-Year Projected Earnings Per Share Growth Rate||27.92%|
Edwards Lifesciences Corporation provides products and technologies to treat advanced cardiovascular diseases or critically ill patients worldwide. The company offers heart valve therapy products, including tissue heart valves and repair products, which are used to replace or repair a patient's diseased or defective heart valve; and produces pericardial and porcine valves from biologically inert animal tissue sewn onto proprietary wire form stents. The company distributes its products through direct sales force and independent distributors. Edwards Lifesciences Corporation was founded in 1999 and its headquarters is in Irvine, California.
Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 10/01/2012.