6 Cash Heavy Small-Cap Healthcare Stocks Rated As Buys

by: ZetaKap

Interested in following smaller companies? Interested in healthcare stocks? Do you prefer investing in stocks that analysts have weighed in on? Do you value companies holding large amounts of cash? If so, here are some ideas to start your stock search.

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 healthcare stocks. We then looked for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). Next, we then screened for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2).

Do you think these small-cap stocks will perform well? Use our list to help with your own analysis.

ArthroCare Corporation (NASDAQ:ARTC)

Sector: Healthcare
Industry: Medical Appliances & Equipment
Market Cap: $703.95M
Beta: 1.62

ArthroCare Corporation has an Analysts' Rating of 2.30, a Current Ratio of 5.96 and Quick Ratio of 5.19. The short interest was 3.20% as of 05/09/2012. ArthroCare Corporation, a medical device company, develops, manufactures and markets surgical products primarily based on its minimally invasive patented Coblation technology in the Americas and internationally. The company's Sports Medicine business provides energy-based systems and fixation technologies used to treat soft tissue injuries in the shoulders, knees and hips. It offers ArthroWands product line that features Coblation based specialized disposable energy-based surgical wands designed for single patient use to treat orthopedic conditions, including shoulder, knee, hip, foot, ankle, elbow, and wrist injuries; and Soft-Tissue Fixation products comprising a line of specialized implants and instruments, such as knotless and traditional anchors for rotator cuff and labrum repairs in shoulder; screws for ligament reconstruction in knee; a range of arthroscopic suture passers; and reusable hand-held instruments, procedural kits and accessories.

Avanir Pharmaceuticals (NASDAQ:AVNR)

Sector: Healthcare
Industry: Drugs - Generic
Market Cap: $379.52M
Beta: 2.06

Avanir Pharmaceuticals has an Analysts' Rating of 1.70, Current Ratio of 5.84 and Quick Ratio of 5.81. The short interest was 18.30% as of 05/09/2012. Avanir Pharmaceuticals, Inc., together with its subsidiaries, engages in acquiring, developing, and commercializing novel therapeutic products for the treatment of central nervous system disorders primarily in the United States. The company primarily offers NUEDEXTA, a unique proprietary combination of dextromethorphan and low-dose quinidine for the treatment of pseudobulbar affect.

Akorn, Inc. (NASDAQ:AKRX)

Sector: Healthcare
Industry: Drugs - Generic
Market Cap: $1.17B
Beta: 1.16

Akorn, Inc. has an Analysts' Rating of 2.00, Current Ratio of 5.51 and Quick Ratio of 4.26. The short interest was 16.14% as of 05/09/2012. Akorn, Inc. engages in the manufacture and marketing of diagnostic and therapeutic ophthalmic pharmaceuticals products, niche hospital drugs, and injectable pharmaceuticals in the United States and internationally. It offers products in various specialty areas, including ophthalmology, antidotes, anti-infectives, pain management, anesthesia, and vaccines. The company's Ophthalmic segment markets diagnostic products, including mydriatics and cycloplegics, anesthetics, topical stains, gonioscopic solutions, angiography dyes, and others primarily for use in the office setting.

Acorda Therapeutics, Inc. (NASDAQ:ACOR)

Sector: Healthcare
Industry: Biotechnology
Market Cap: $960.72M
Beta: 0.47

Acorda Therapeutics, Inc. has an Analysts' Rating of 2.50, Current Ratio of 4.24 and Quick Ratio of 3.89. The short interest was 6.42% as of 05/09/2012. Acorda Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the identification, development, and commercialization of novel therapies for multiple sclerosis (MS), spinal cord injury (SCI), and other central nervous system disorders primarily in the United States. Its marketed products include Ampyra (dalfampridine), a potassium channel blocker for improving walking in patients with MS; and Zanaflex Capsules and Zanaflex tablets (tizanidine hydrochloride), a short-acting drug for the management of spasticity. The company also markets products for the improvement of walking in adult patients with MS with walking disability under the Fampyra name internationally.

Auxilium Pharmaceuticals Inc. (NASDAQ:AUXL)

Sector: Healthcare
Industry: Drug Related Products
Market Cap: $854.21M
Beta: 0.73

Auxilium Pharmaceuticals Inc. has an Analysts' Rating of 2.40, Current Ratio of 2.80 and Quick Ratio of 2.22. The short interest was 8.14% as of 05/09/2012. Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, together with its subsidiaries, engages in developing and marketing pharmaceutical products primarily in the United States. It markets Testim, a testosterone gel for the treatment of hypogonadism; and XIAFLEX (collagenase clostridium histolyticum), an injectable collagenase enzyme for the treatment of Dupuytren's contracture in adult patients with a palpable cord. The company is also developing XIAFLEX, which is in Phase III clinical trial for the treatment of Peyronie's disease, in Phase IIa clinical trial for the treatment of Adhesive Capsulitis (frozen shoulder syndrome), and in Phase Ib clinical trial for the treatment of edematous fibrosclerotic panniculopathy indications.

Abaxis Inc. (NASDAQ:ABAX)

Sector: Healthcare
Industry: Diagnostic Substances
Market Cap: $760.67M
Beta: 1.17

Abaxis Inc. has an Analysts' Rating of 2.10, Current Ratio of 7.31 and Quick Ratio of 6.18. The short interest was 6.84% as of 05/09/2012. Abaxis, Inc. develops, manufactures, markets and sells portable blood analysis systems for use in veterinary or human patient-care setting to provide blood constituent measurements for clinicians worldwide. The company offers point-of-care blood chemistry analyzer, which consists of a compact portable analyzer and a series of single-use plastic discs, called reagent discs, containing all the chemicals required to perform a panel of up to 14 tests on human patients and 13 tests on veterinary patients. It markets the blood analysis system under the Piccolo Xpress and Piccolo Classic names in the medical market; and under the VetScan VS2 and VetScan Classic names in the veterinary market.

*Company profiles were sourced from Finviz. Financial data was sourced from Yahoo Finance.

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

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