6 Low-Debt Mid Caps With Plenty Of Cash

by: ZetaKap

If you are an investor who takes care with your personal finances to always have a reasonable amount of savings on hand while keeping debt manageable, it makes sense that you would hold companies that you invest in to a similar standard. You know from experience that unanticipated expenses are part of life, and it is much better to have funds accessible than to accrue debt. We ran a scan to find stocks in the mid cap sector that are demonstrating the same fiscal oversight: minimal debt and good liquidity. Use the data and summaries below as a starting place for further investigation of these mid cap stocks.

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 mid cap stocks. We next screened for businesses that have strong liquidity (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). We did not screen out any sectors.

Do you think these mid-cap stocks are at too low of valuations, given their fundamentals? Use this list as a starting-off point for your own analysis.

1) Makita Corp. (NASDAQ:MKTAY)

Sector Industrial Goods
Industry Small Tools & Accessories
Market Cap $5.29B
Beta 0.95

MKTAY stock chart

Key Metrics

Current Ratio 5.81
Quick Ratio 3.07
Long Term Debt/Equity Ratio 0.00
Short Interest 0.01%

Makita Corporation engages in the manufacture and sale of a range of power tools for professional users worldwide. It offers drills, including pistol-grip drills, D-handle drills, spade-handle drills, and angle drills, as well as cordless drills cordless driver drills, which are used for drilling in metals, woods, and plastics; grinders comprising portable disc grinders and bench grinders; and sanders that include portable disc sanders and belt sanders; rotary hammers for construction industry; and ordinary hammers. It offers its products to commercial and professional users, such as those engaged in timber and metal processing, carpentry, and concrete and masonry works through distributors. The company, formerly known as Makita Electric Works, Ltd. was founded in 1915 and changed its name to Makita Corporation in 1991. Makita Corporation is headquartered in Anjo City, Japan.

2) Thoratec Corp. (NASDAQ:THOR)

Sector Healthcare
Industry Medical Instruments & Supplies
Market Cap $2.04B
Beta 0.85

THOR stock chart

Key Metrics

Current Ratio 7.77
Quick Ratio 6.90
Long Term Debt/Equity Ratio 0.00
Short Interest 3.43%

Thoratec Corporation engages in the development, manufacture, and marketing of proprietary medical devices used for circulatory support. The company's primary product lines include ventricular assist devices, such as HeartMate II, an implantable left ventricular assist device consisting of a rotary blood pump to provide intermediate and long-term mechanical circulatory support; and HeartMate XVE, an implantable and pulsatile left ventricular assist device for intermediate and longer-term MCS. Thoratec Corporation was founded in 1976 and is headquartered in Pleasanton, California.

3) MSC Industrial Direct Co. Inc. (NYSE:MSM)

Sector Services
Industry Industrial Equipment Wholesale
Market Cap $4.56B
Beta 1.25

MSM stock chart

Key Metrics

Current Ratio 5.20
Quick Ratio 2.84
Long Term Debt/Equity Ratio 0.00
Short Interest 2.94%

MSC Industrial Direct Co., Inc., together with its subsidiaries, operates as a direct marketer and distributor of metalworking and maintenance, repair, and operations products to industrial customers in the United States. MSC Industrial Direct Co., Inc. was founded in 1941 and is headquartered in Melville, New York with an additional office in Southfield, Michigan.

4) Lancaster Colony Corporation (NASDAQ:LANC)

Sector Consumer Goods
Industry Food - Major Diversified
Market Cap $2.00B
Beta 0.37

LANC stock chart

Key Metrics

Current Ratio 5.39
Quick Ratio 3.88
Long Term Debt/Equity Ratio 0.00
Short Interest 9.71%

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 company was founded in 1961 and is based in Columbus, Ohio.

5) Myriad Genetics Inc. (NASDAQ:MYGN)

Sector Services
Industry Research Services
Market Cap $2.24B
Beta 0.42

MYGN stock chart

Key Metrics

Current Ratio 9.40
Quick Ratio 9.14
Long Term Debt/Equity Ratio 0.00
Short Interest 5.84%

Myriad Genetics, Inc., a molecular diagnostic company, focuses on the development and marketing of predictive medicine, personalized medicine, and prognostic medicine tests primarily in the United States. Myriad Genetics, Inc. was founded in 1991 and is headquartered in Salt Lake City, Utah.

6) Gentex Corp. (NASDAQ:GNTX)

Sector Consumer Goods
Industry Auto Parts
Market Cap $2.55B
Beta 1.45

GNTX stock chart

Key Metrics

Current Ratio 7.33
Quick Ratio 5.51
Long Term Debt/Equity Ratio 0.00
Short Interest 6.90%

Gentex Corporation designs, develops, manufactures, and markets electro-optical products for the automotive, commercial building, and aircraft industries primarily in the United States, Germany, and Japan. Gentex Corporation was founded in 1974 and is headquartered in Zeeland, Michigan.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/23/2012.

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.