6 Cash Rich Small Cap Tech Stocks With Minimal Debt

by: ZetaKap

Good fiscal management doesn't happen by accident. Companies have to work hard to be fiscally prudent. That means keeping a careful and close eye on every aspect of the business. When a company can stock pile cash it shows that there is a commitment to maintaining a sound business for the long term. Smart managers know that cash on hand prevents the business from falling apart when the unexpected occurs. Today we focused on small caps in the tech sector. The companies in our list all have a great level of liquidity with little long term debt. We think you will find our list worthy of a deeper look.

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).

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.

We first looked for small cap technology stocks. We then looked for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). Next, we then screened for businesses that operate with little to no long term debt (Long Term D/E Ratio<.1).

Do you think these small-cap stocks deserve to grow higher? Use our list along with your own analysis.

1) Volterra Semiconductor Corporation (NASDAQ:VLTR)

Sector Technology
Industry Semiconductor - Integrated Circuits
Market Cap $623.52M
Beta 1.43

VLTR stock chart

Key Metrics

Current Ratio 11.51
Quick Ratio 10.49
Long Term Debt/Equity Ratio 0.00
Short Interest 5.45%

Volterra Semiconductor Corporation engages in the design, development, and marketing of analog and mixed-signal power management semiconductors for computing, storage, networking, and consumer markets. Its products include integrated voltage regulator semiconductors, integrated power protection and distribution semiconductors, and scalable voltage regulator semiconductor chipsets that transform, regulate, deliver, and monitor the power consumed by digital semiconductors. The company sells its products primarily to original equipment manufacturers, original design manufacturers, contract equipment manufacturers, and merchant power supply manufacturers directly through its internal sales force, as well as indirectly through distributors and outsourced suppliers. It has operations in the United States, China, Singapore, Japan, Taiwan, and Germany. Volterra Semiconductor Corporation was founded in 1996 and is headquartered in Fremont, California.

2) Tessera Technologies Inc. (TSRA)

Sector Technology
Industry Semiconductor Equipment & Materials
Market Cap $769.90M
Beta 1.42

TSRA stock chart

Key Metrics

Current Ratio 12.75
Quick Ratio 12.68
Long Term Debt/Equity Ratio 0.00
Short Interest 4.16%

Tessera Technologies, Inc., through its subsidiaries, develops, licenses, and delivers miniaturization technologies and products for electronic devices worldwide. The company operates in two segments, Intellectual Property and DigitalOptics. The Intellectual Property segment offers semiconductor packaging technologies, which create mechanical and electrical connection between semiconductor chips and systems, such as computers and communication equipments through connection to printed circuit boards. The DigitalOptics segment provides mobile camera module solutions in categories, including actuator technologies, image enhancement solutions, and wafer level optics that can be applied to mobile phones and other consumer electronic products. It also offers customized micro-optic lenses from diffractive and refractive optical elements to integrated micro-optical subassemblies. This segment serves customers in digital still cameras and mobile handsets markets, as well as semiconductor lithography, high-end communication routers, military and defense, and barcode scanners markets. Tessera Technologies, Inc. was founded in 1990 and is headquartered in San Jose, California.

3) Encore Wire Corp. (NASDAQ:WIRE)

Sector Technology
Industry Diversified Electronics
Market Cap $679.00M
Beta 0.85

WIRE stock chart

Key Metrics

Current Ratio 6.19
Quick Ratio 5.15
Long Term Debt/Equity Ratio 0.00
Short Interest 4.96%

Encore Wire Corporation manufactures and supplies electrical building wires and cables for use in interior electrical wiring applications in commercial and industrial buildings, homes, apartments, and manufactured housings. The company's products include NM-B Cable, a non-metallic sheathed cable primarily used as interior wiring in homes, apartments, and manufactured housing; UF-B Cable, an underground feeder cable that is used to conduct power underground to outside lighting and other applications remote from buildings; and THHN/THWN-2 Cable, which is primarily used as feeder, circuit, and branch wiring in commercial and industrial buildings. Its products also comprise XHHW-2 Cable and USE-2 Cable that are intended for general purpose applications utilized in conduit or other recognized raceways for service, feeders, and branch-circuit wiring; metal clad and armored cables, which are primarily used as feeder, circuit, and branch wiring in commercial and industrial buildings; photovoltaic (PV) style cables that are used to provide connections between PV panels, collector boxes, and inverters; and bare copper conductors that are used in overhead electrical transmission and distribution systems for grounding electrical systems. In addition, the company purchases and re-sells other types of wires. It markets its products primarily through independent manufacturers' representatives, as well as directly to wholesale electrical distributors and retail home improvement centers in the United States. Encore Wire Corporation was founded in 1989 and is based in McKinney, Texas.

4) Acme Packet, Inc. (NASDAQ:APKT)

Sector Technology
Industry Communication Equipment
Market Cap $1.17B
Beta 1.39

APKT stock chart

Key Metrics

Current Ratio 9.04
Quick Ratio 8.80
Long Term Debt/Equity Ratio 0.00
Short Interest 13.62%

Acme Packet, Inc. provides session delivery network solutions that enable the delivery of voice, video, data, and unified communications services and applications across Internet protocol (IP) networks. Its Net-Net product family consists of session border controllers that control session delivery across defined border points; session managers, which manage user access and interface application servers; multiservice security gateways for securing session delivery of data and voice services over untrusted Internet and wireless fidelity access networks; and diameter signaling controllers. The company's Net-Net products also comprise session-aware load balancers that scales border control for SBC, MSG, and DSC deployments; session routing proxies that route sessions to/from access and interconnect borders; application session controllers for enabling server applications to initiate and control sessions; and session recorders, a complete software-based IP session recording solution, which performs session recording for the session delivery network. In addition, it offers purpose-built hardware platforms, including Net-Net 3820, 4500, 9200, and 14000; and Net-Net Central, a management platform that delivers configuration and fault, and performance and security management for its session delivery networks. Further, the company offers products that provide core session delivery network functions inside data centers as software products; and pre-installation and post-installation, and training services. Acme Packet, Inc. markets and sells its products and support services through distribution partners and sales force. It serves local exchange and long distance providers, international service providers, cable operators, Internet telephony service providers, voice application service providers, wireless service providers, enterprises, contact centers, universities, and government agencies worldwide. Acme Packet, Inc. is headquartered in Bedford, Massachusetts.

5) Monolithic Power Systems Inc. (NASDAQ:MPWR)

Sector Technology
Industry Semiconductor - Specialized
Market Cap $785.64M
Beta 1.52

MPWR stock chart

Key Metrics

Current Ratio 6.69
Quick Ratio 5.86
Long Term Debt/Equity Ratio 0.00
Short Interest 10.39%

Monolithic Power Systems, Inc., a fabless semiconductor company, designs, develops, and markets analog and mixed-signal semiconductors. It offers direct current (DC) to DC converter integrated circuits (IC) that are used to convert and control voltages of various electronic systems, such as portable electronic devices, wireless LAN access points, computers, set top boxes, televisions and monitors, automobiles, and medical equipment. The company also produces lighting control ICs for use in systems that provide the light source for liquid crystal display (LCD) panels in notebook computers, LCD monitors, car navigational systems, and LCD televisions; and alternating current (AC)/DC offline solutions for lighting illumination applications, as well as AC/DC power conversion solutions for a range of end products that plug into a wall outlet. In addition, it offers audio amplifier ICs, such as Class-D audio amplifiers to amplify the sound produced by audio processors in small form factor and high power efficiency applications, including plasma televisions, LCD televisions, and digital versatile disk players. The company serves consumer electronics, communications, and computing markets. It sells its products through third party distributors and value-added resellers, as well as directly to original equipment manufacturers, original design manufacturers, and electronic manufacturing service providers. Monolithic Power Systems, Inc. was founded in 1997 and is headquartered in San Jose, California.

6) Sonus Networks, Inc. (NASDAQ:SONS)

Sector Technology
Industry Communication Equipment
Market Cap $531.98M
Beta 1.75

SONS stock chart

Key Metrics

Current Ratio 6.02
Quick Ratio 5.76
Long Term Debt/Equity Ratio 0.00
Short Interest 5.04%

Sonus Networks, Inc. provides infrastructure and subscriber solutions. It offers session border control (SBC), voice over Internet protocol (VoIP), and access and VoIP media gateway solutions that allow the delivery of voice and multimedia sessions over IP networks. Its products include Sonus SBC 5200 and Sonus SBC 5100 Session Border Controllers, which provide IP to IP SBC functionality for service providers and enterprise customers; Sonus SBC 9000 Session Border Controller that permits service providers to transform their time division multiplexing networks to IP; PSX Policy & Routing Server, which translates business policies into actual call control, routing, and service selection decisions; GSX9000 Open Services Switch that enables voice traffic to be transported over packet networks; GSX4000 Open Services Switch; and ASX Call Feature Server that provides local area calling and regulatory features for residential and enterprise markets. The company also offers Network Analytics Suite of performance management products, including NetScore network performance analysis tool, NetAssure voice quality monitoring tool, and NetEng network audit and visualization engine that are used for the collection, monitoring, reporting, and notification of performance metrics. In addition, it provides professional consulting and services to support its IP communication solutions; and program management, network deployment design, softswitch and subscriber database design, network verification and audit, custom application and adaptor development, OSS and API integration, migration and upgrade, and managed services. The company serves long-distance and local exchange carriers, Internet service providers, wireless operators, cable operators, financial institutions, retailers, state and local governments, multinational corporations, and small to medium enterprise customers. Sonus Networks, Inc. was founded in 1997 and is headquartered in Westford, Massachusetts.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/28/2012.

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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