7 Low-Debt, Highly Liquid Small-Cap Consumer Stocks

by: ZetaKap

When considering investments, especially at the small cap level, it is important to analyze if a company is well positioned for growth. Attributes that foster the growth process are significant cash reserves and minimal debt. When debt is a minor issue, and a company has access to cash, their choices and strategies can revolve around growing the business rather than minimizing expenses and repaying debt. With this in mind, we developed a list of small-cap consumer stocks that are highly liquid with little debt. If these traits appeal to you, then you will like our list 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 the company is to meet current obligations using liquid assets).

We first looked for small-cap consumer stocks. Next, we screened for businesses that operate with little to no long-term debt (Long Term D/E Ratio<0.1). We then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2).

Do you think these small-cap stocks will break through to new highs? Please use our list to assist with your own analysis.

1) National Presto Industries Inc. (NYSE:NPK)

Sector Consumer Goods
Industry Appliances
Market Cap $494.33M
Beta 0.81

NPK stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 5.24
Quick Ratio 3.69
Short Interest 23.48%

National Presto Industries, Inc. provides housewares and small appliances, defense products, and absorbent products primarily in North America. It operates in three segments: Housewares/Small Appliance, Defense Products, and Absorbent Products. The Housewares/Small Appliance segment engages in the design, marketing, and distribution of housewares and small electrical appliances, including pressure cookers and canners; heat control single thermostatic control line of skillets, griddles, woks, and multi-purpose cookers; deep fryers; waffle makers; pizza ovens; slicer/shredders; electric heaters; corn poppers; rice cookers; microwave bacon cookers; coffeemakers and coffeemaker accessories; electric tea kettles; electric knife sharpeners; shoe polishers; and timers. This segment sells its products directly to retailers, as well as through independent distributors. The Defense Products segment manufactures 40mm ammunition, and precision mechanical and electro-mechanical assemblies, such as training ammunition, fuzes, firing devices, and initiators; munitions and ordnance-related products; medium caliber cartridge cases; and performs load, assemble, and pack operations on ordnance related products primarily for the United States Department of Defense (DOD) and DOD prime contractors. This segment produces and sells various less-lethal products, including smoke and tear gas grenades, specialty impact munitions, diversionary devices, and stun munitions, as well as support accessories, such as launchers and gas masks; and provides training for the use of less-lethal products. The Absorbent Products segment manufactures and sells principally private label adult incontinence products and diapers. This segment sells its products to distributors and other absorbent product manufacturers. The company was founded in 1905 and is based in Eau Claire, Wisconsin.

2) Lancaster Colony Corporation (NASDAQ:LANC)

Sector Consumer Goods
Industry Food - Major Diversified
Market Cap $1.99B
Beta 0.35

LANC stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 4.68
Quick Ratio 3.44
Short Interest 10.48%

Lancaster Colony Corporation engages in the manufacture and marketing of consumer products focusing primarily on specialty foods for the retail and foodservice markets in the United States. The company operates in two segments, Specialty Foods, and Glassware and Candles. The Specialty Foods segment produces and sells food products, including salad dressings and sauces under the Marzetti, T. Marzetti, Cardini's, Pfeiffer, and Girard's brands; fruit glazes, vegetable dips, and fruit dips under T. Marzetti brand; Greek yogurt vegetable dips under the Otria brand; frozen breads under New York BRAND and Mamma Bella brands; frozen Parkerhouse style yeast dinner rolls and sweet rolls, as well as biscuits, under the Sister Schubert's, Marshall's, and Mary B's brands; premium dry egg noodles under the Inn Maid and Amish Kitchen brands; frozen specialty noodles and pastas under the Reames and Aunt Vi's brands; croutons and related products under the New York BRAND, Texas Toast, Chatham Village, Cardini's, and T. Marzetti brands; and caviar under the Romanoff brand. This segment markets its products through sales personnel, food brokers, and distributors to retail, club store, foodservice, and industrial markets. The Glassware and Candles segment produces and markets candles, candle accessories, and other home fragrance products in various sizes, forms, and fragrance in retail markets to mass merchants, supermarkets, drug stores, and specialty shops under the Candle-lite brand name. This segment also sells candles, glassware, and various other products to customers in commercial markets, including restaurants, hotels, hospitals, and schools. The company was founded in 1961 and is based in Columbus, Ohio.

3) Crocs, Inc. (NASDAQ:CROX)

Sector Consumer Goods
Industry Textile - Apparel Footwear & Accessories
Market Cap $1.59B
Beta 1.64

CROX stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 3.66
Quick Ratio 2.71
Short Interest 7.51%

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. It designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. The company's footwear products include boots, sandals, sneakers, mules, and flats. It also provides footwear products for the healthcare, service/hospitality, and airline markets; and general foot care and diabetic needs markets, as well as offers ethylene vinyl acetate footwear, sandals, and printed apparel for the beach, action, and adventure markets; and snap-on charms. The company sells its products through the United States and international retailers and distributors, as well as directly to end-user consumers through its company-operated retail stores, outlets, kiosks, and Web stores primarily under the Crocs Work, Crocs Rx, Ocean Minded, and Jibbitz brand names. As of December 31, 2011, it operated 158 kiosks located in malls and other high foot traffic areas; 180 retail stores; 92 outlet stores; and 42 Web stores. Crocs, Inc. was founded in 1999 and is headquartered in Niwot, Colorado.

4) Peet's Coffee & Tea, Inc. (NASDAQ:PEET)

Sector Consumer Goods
Industry Processed & Packaged Goods
Market Cap $971.02M
Beta 0.87

PEET stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 4.72
Quick Ratio 2.44
Short Interest 25.45%

Peet's Coffee & Tea, Inc., together with its subsidiaries, operates as a specialty coffee roaster and marketer of fresh-roasted coffee and tea in the United States. It offers whole bean coffee and related products consisting of products for home brewing, tea, and packaged foods; and beverages and pastries. The company sells its Peet's brand coffee and tea through various channels of distribution, including grocery stores, home delivery, office, and restaurant and foodservice accounts, as well as company-owned and-operated stores. As of January 1, 2012, it operated 196 retail stores in California, Colorado, Illinois, Oregon, Massachusetts, and Washington. Peet's Coffee & Tea, Inc. was founded in 1966 and is headquartered in Emeryville, California.

5) J&J Snack Foods Corp. (NASDAQ:JJSF)

Sector Consumer Goods
Industry Processed & Packaged Goods
Market Cap $1.09B
Beta 0.68

JJSF stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 3.30
Quick Ratio 2.47
Short Interest 2.80%

J&J Snack Foods Corp. manufactures nutritional snack foods; and distributes frozen beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It offers soft pretzels, frozen juice treats and desserts, churros, dough enrobed handheld products, and baked goods to snack bars and food stands in chain, department, discount, convenience, and warehouse club stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure and theme parks; movie theatres; and schools, colleges, and other institutions. The company also provides bakery products, such as biscuits, fig and fruit bars, cookies, muffins, and donuts, as well as soft drinks and funnel cakes. J&J Snack Foods Corp. sells its soft pretzels under the brand names of SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, HOT KNOTS, DUTCH TWIST, TEXAS TWIST, SANDWICH TWIST, CINNAPRETZEL, and SERIOUSLY TWISTED!. The company markets its frozen juice treats and desserts under the LUIGI'S, FRUIT-A-FREEZE, WHOLE FRUIT, ICEE, BARQ'S, and MINUTE MAID brand names; churros under the LA CHURROS, TIO PEPE'S, and CALIFORNIA CHURROS brand names; dough enrobed handheld products under the PATIO, HAND FULLS, HOLLY RIDGE BAKERY, VILLA TALIANO, and TOP PICKS brand names; bakery products under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and PRETZEL COOKIE brand names; frozen beverages under the names of ICEE, SLUSH PUPPIE, PARROT ICE, ARCTIC BLAST, JAVA FREEZE, and CALIFORNIA NATURAL; and soft drinks and funnel cakes under the FUNNEL CAKE FACTORY brand name. It sells its products through a network of food brokers and independent sales distributors, as well as through its direct sales force. As of September 24, 2011, it operated two BAVARIAN PRETZEL BAKERY retail stores. The company was founded in 1971 and is headquartered in Pennsauken, New Jersey.

6) WMS Industries Inc. (NYSE:WMS-OLD)

Sector Consumer Goods
Industry Recreational Goods, Other
Market Cap $896.70M
Beta 1.61

WMS stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.07
Current Ratio 2.65
Quick Ratio 2.34
Short Interest 10.93%

WMS Industries Inc., through its subsidiaries, engages in the design, manufacture, and distribution of games, video and mechanical reel-spinning gaming machines, and video lottery terminals (VLTs) for the legalized gaming industry worldwide. The company provides video gaming machines and mechanical reel gaming machines under the Bluebird, Bluebird2, Bluebird xD, Twinstar, and Helios brands. It also sells replacement parts; conversion kits, including game, hardware, or operating system conversions; and used gaming machines. In addition, the company licenses its gaming themes and other intellectual property to third parties; and leases gaming machines and VLTs to casinos and other licensed gaming machine operators. Further, it engages in gaming operations activities that include providing participation games, such as wide-area progressive participation games under the MONOPOLY GRAND HOTEL, MONOPOLY Big Event, MONOPOLY Around the Globe, THE WIZARD OF OZ, THE PRICE IS RIGHT, TIME MACHINE, and Reel em In Compete To Win brand names; local-area progressive participation games under the Jackpot Party Progressive, Life of Luxury Progressive, Hot Hot Super Jackpot Progressive, Goldfish Race for the Gold, Money to Burn Multiplying Progressive, and HAPPY DAYS; stand-alone participation games under the MONOPOLY and PRESS YOUR LUCK brands; casino-owned daily fee games; leased for-sale games; and Class II and centrally determined systems, as well as networked and online gaming services. The company, formerly known as Williams Electronics, Inc., was founded in 1943 and is headquartered in Waukegan, Illinois.

7) iRobot Corporation (NASDAQ:IRBT)

Sector Consumer Goods
Industry Appliances
Market Cap $695.27M
Beta 1.20

IRBT stock chart

Key Metrics

Long Term Debt/Equity Ratio 0.00
Current Ratio 3.91
Quick Ratio 3.42
Short Interest 12.92%

iRobot Corporation engages in designing, developing, and marketing 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. The company also provides government and industrial products, such as ground robots comprising 510 PackBot line of small unmanned ground robots; the 310 small unmanned ground vehicle (SUGV) and XM1216 SUGV multi-purpose ground robots; the 110 FirstLook small, light, and throwable robot; and the 710 Warrior multi-purpose robot that is capable of carrying heavy payloads. In addition, its government and industrial products include maritime unmanned vehicles, such as the 1KA Seaglider, an underwater vehicle designed for oceanic missions to measure temperature, salinity, current profiles, and other data for the scientific and research community, military planners, and offshore oil engineers. The company sells its robots to consumers through chain stores and other national retailers, as well as through its on-line store; and to the U.S. military, and other government agencies. iRobot Corporation was founded in 1990 and is headquartered in Bedford, Massachusetts.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/25/2012.

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.