5 Highly Liquid, Low-Debt Small Cap Consumer Stocks

by: ZetaKap

It makes sense for a lot of us to stick with investing in things we can understand, touch or see. We can quickly understand what these companies do, and how the services or products they provide fit into the world. But just because a company seems to have hit upon a trend that people like at the moment doesn't mean it has the staying power to be a wise investment. These companies still need solid financial standing. That is why we gathered a list of consumer stocks that demonstrate financial stamina by keeping debt to a minimum while maintaining a strong level of liquidity. If these traits appeal to you, then you will like the list of consumer stocks we have summarized below.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio. This value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

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 small cap consumer stocks. From here, we then looked for companies that have maintained a sound long term capital structure (Long Term D/E Ratio<.1). We then looked for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2).

Do you think these small cap stocks deserve to trade higher? Use this list as a starting point for your own analysis.

1) iRobot Corporation (NASDAQ:IRBT)

Sector Consumer Goods
Industry Appliances
Market Cap $495.25M
Beta 1.24

IRBT stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 4.35
Quick Ratio 3.88
Short Interest 8.58%

iRobot Corporation designs, develops, and markets robots for the consumer, government, and industrial markets worldwide. It offers consumer products, including floor vacuuming and washing robots, and pool and gutter cleaning robots. iRobot Corporation was founded in 1990 and is headquartered in Bedford, Massachusetts.

2) Crocs, Inc. (NASDAQ:CROX)

Sector Consumer Goods
Industry Textile - Apparel Footwear & Accessories
Market Cap $1.14B
Beta 1.63

CROX stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 3.42
Quick Ratio 2.49
Short Interest 5.75%

Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children in the Americas, Europe, and Asia. The company primarily offers casual and athletic shoes, and shoe charms. Crocs, Inc. was founded in 1999 and is headquartered in Niwot, Colorado.

3) Movado Group, Inc. (NYSE:MOV)

Sector Consumer Goods
Industry Recreational Goods, Other
Market Cap $797.00M
Beta 1.80

MOV stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 5.92
Quick Ratio 3.45
Short Interest 4.37%

Movado Group, Inc. designs, sources, markets, and distributes fine watches. It offers its watches under the Movado, Ebel, Concord, ESQ by Movado, Coach, HUGO BOSS, Juicy Couture, Tommy Hilfiger, Lacoste, and Ferrari brands. Movado Group, Inc. was founded in 1961 and is headquartered in Paramus, New Jersey.

4) True Religion Apparel, Inc. (NASDAQ:TRLG)

Sector Consumer Goods
Industry Textile - Apparel Clothing
Market Cap $661.56M
Beta 1.46

TRLG stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 7.80
Quick Ratio 6.10
Short Interest 10.08%

True Religion Apparel, Inc. designs, develops, manufactures, markets, distributes, and sells apparel in North America, Europe, Asia, Australia, Africa, and South America. It offers fashion jeans and related sportswear apparel. True Religion Apparel, Inc. was founded in 2002 and is headquartered in Vernon, California.

5) SHFL Entertainment, Inc. (NASDAQ:SHFL)

Sector Consumer Goods
Industry Recreational Goods, Other
Market Cap $790.71M
Beta 1.45

SHFL stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.06
Current Ratio 2.97
Quick Ratio 2.33
Short Interest 2.90%

SHFL Entertainment, Inc. manufactures and distributes gaming devices, and operates inter-casino linked systems and slot routes. It leases, licenses, and sells its products. The company operates through four segments: Utility, Proprietary Table Games, Electronic Table Systems, and Electronic Gaming Machines. The company was formerly known as Shuffle Master, Inc. and changed its name to SHFL Entertainment, Inc. in October 2012. SHFL Entertainment, Inc. was founded in 1983 and is headquartered in Las Vegas, Nevada.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 11/01/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

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