Many investors agree that large companies can offer stability and reliability not found among smaller alternatives. After all, rarely does a company rise to large cap status without finely tuning it's business model or building a solid management team. To find the most promising companies in the large-cap tier, today we looked for those holding large cash reserves. Besides signaling a sound financial footing, having cash on hand can do a variety of things for a company, be it for fueling large mergers or acquisitions, investing in innovative research and development, or continuing to corner the market of their expertise. To hone in on companies that truly are best in their class, we further focused our search to include only the companies that analysts have rated as 'Buy' or better, suggesting that now is the time to give these companies more time and research. If you're looking for large cap stocks that hold huge promise, you will probably like the list of companies we uncovered today.
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 large cap stocks. We next screened for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We then looked for companies that analysts rate as "Buy" (2 < mean recommendation < 3). We did not screen out any sectors.
Do you think these large-cap stocks failed to price their value accurately? Use this list as a starting-off point for your own analysis.
1) Stryker Corp. (SYK)
| :Sector | Healthcare |
| :Industry | Medical & AppliancesEquipment |
| Market:Cap | $20.24B |
| :Beta | 0.88 |
Stryker Corp. has a Current Ratio of 4.83, a Quick Ratio of 3.97, and a Analysts' Rating of 2.10. The short interest was 1.74% as of 08/14/2012. Stryker Corporation, together with its subsidiaries, operates as a medical technology company. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spine. The Reconstructive segment offers orthopaedic reconstructive (hip and knee) and trauma implant systems, as well as other related products. The MedSurg segment provides surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling and emergency medical equipment, reprocessed and remanufactured medical devices, and other medical device products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems, and other related products. The company sells its products through local dealers and direct sales force to doctors, hospitals, and other healthcare facilities, as well as through third-party dealers and distributors primarily in the United States, Ireland, Germany, France, Switzerland, the United Kingdom, Japan, Canada, the Pacific region, and Latin America.
2) Altera Corp. (ALTR)
| :Sector | Technology |
| :Industry | - SemiconductorSpecialized |
| Market:Cap | $11.75B |
| :Beta | 1.15 |
Altera Corp. has a Current Ratio of 6.17, a Quick Ratio of 5.92, and a Analysts' Rating of 2.30. The short interest was 2.22% as of 08/14/2012. Altera Corporation, a semiconductor company, designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools. The company's PLDs consist of field-programmable gate arrays (FPGAs) and complex programmable logic devices (CPLDs), which are standard semiconductor integrated circuits or chips to perform desired logic functions in the electronic systems; and HardCopy structured ASIC devices that comprise transition customer designs from high-density FPGAs to low-cost non-programmable implementations for volume production. Its products primarily include Stratix series high-end, system-level FPGAs; Arria series mid-range transceiver and embedded processor equipped FPGAs; Cyclone series low-cost transceiver and embedded processor equipped FPGAs; MAX series CPLDs; and HardCopy ASICs. The company's products also comprise intellectual property cores in hard and soft forms that are pre-verified building blocks that execute system-level functions; and development tools consisting primarily of the Quartus II software for design entry, design compilation, design verification, and device programming.
3) Allergan Inc. (AGN)
| :Sector | Healthcare |
| :Industry | Drug - ManufacturersOther |
| Market:Cap | $26.32B |
| :Beta | 0.80 |
Allergan Inc. has a Current Ratio of 4.42, a Quick Ratio of 4.15, and a Analysts' Rating of 2.00. The short interest was 1.07% as of 08/14/2012. Allergan, Inc. operates as a multi-specialty healthcare company primarily in the United States, Europe, Latin America, and the Asia Pacific. The company discovers, develops, and commercializes specialty pharmaceutical, biologics, medical device, and over-the-counter products for the ophthalmic, neurological, medical aesthetics, medical dermatological, breast aesthetics, obesity intervention, urological, and other specialty markets worldwide. It operates in two segments, Specialty Pharmaceuticals and Medical Devices.
4) Edwards Lifesciences Corp. (EW)
| :Sector | Healthcare |
| :Industry | Medical & AppliancesEquipment |
| Market:Cap | $11.32B |
| :Beta | 0.52 |
Edwards Lifesciences Corp. has a Current Ratio of 4.50, a Quick Ratio of 3.56, and a Analysts' Rating of 2.10. The short interest was 2.78% as of 08/14/2012. Edwards Lifesciences Corporation provides products and technologies to treat advanced cardiovascular diseases or critically ill patients worldwide. The company offers heart valve therapy products, including tissue heart valves and repair products, which are used to replace or repair a patient's diseased or defective heart valve; and produces pericardial and porcine valves from biologically inert animal tissue sewn onto proprietary wire form stents. It also provides critical care products comprising hemodynamic monitoring systems to measure a patient's heart function in surgical and intensive care settings; Swan-Ganz line of pulmonary artery catheters and PreSep continuous venous oximetry catheters for measuring central venous oxygen saturation; PediaSat oximetry catheters for children; VolumeView sensor-catheters; and FloTrac continuous cardiac output monitoring system, a minimally invasive cardiac monitoring technology for goal-directed fluid optimization. In addition, the company offers cardiac surgery system products, such as ThruPort minimal incision valve surgery platform that enables surgeons to perform intricate procedures through small incisions and tailor procedures; cannulae, which are used during cardiac surgery in venous drainage, aortic perfusion, venting, and cardioplegia delivery; embolic protection devices; and minimally invasive surgery products.
5) Zimmer Holdings, Inc. (ZMH)
| :Sector | Healthcare |
| :Industry | Medical & AppliancesEquipment |
| Market:Cap | $10.72B |
| :Beta | 0.99 |
Zimmer Holdings, Inc. has a Current Ratio of 5.09, a Quick Ratio of 3.69, and a Analysts' Rating of 2.40. The short interest was 2.56% as of 08/14/2012. Zimmer Holdings, Inc., through its subsidiaries, engages in the design, development, manufacture, and marketing of orthopedic reconstructive devices, spinal and trauma devices, dental implants, and related surgical products in the Americas, Europe, and the Asia Pacific. The company offers orthopedic reconstructive devices that restore function lost due to disease or trauma in joints such as knees, hips, shoulders, and elbows; dental reconstructive implants, which restore function and aesthetics in patients who have lost teeth due to trauma or disease; spinal devices that are utilized by orthopedic surgeons and neurosurgeons in the treatment of degenerative diseases, deformities, and trauma in various regions of the spine; and trauma devices used primarily to reattach or stabilize damaged bone and tissue to support the body's natural healing process. It also provides surgical products comprising surgical supplies and instruments designed to aid in orthopedic surgical procedures and post-operation rehabilitation.
6) Analog Devices Inc. (ADI)
| :Sector | Technology |
| :Industry | - Semiconductor IntegratedCircuits |
| Market:Cap | $12.09B |
| :Beta | 1.09 |
Analog Devices Inc. has a Current Ratio of 8.10, a Quick Ratio of 7.55, and a Analysts' Rating of 2.10. The short interest was 2.53% as of 08/14/2012. Analog Devices, Inc. engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits (ICS) used in industrial, automotive, consumer, and communication applications. The company's signal processing products involve in converting, conditioning, and processing real-world phenomena, such as temperature, pressure, sound, light, speed, and motion into electrical signals. Its product range includes data converters, amplifiers and linear products, radio frequency ICs, power management products, sensors based on micro-electro mechanical systems technology and other sensors, and processing products.
7) Corning Inc. (GLW)
| :Sector | Technology |
| :Industry | DiversifiedElectronics |
| Market:Cap | $17.15B |
| :Beta | 1.39 |
Corning Inc. has a Current Ratio of 4.96, a Quick Ratio of 4.43, and a Analysts' Rating of 2.30. The short interest was 1.74% as of 08/14/2012. Corning Incorporated produces specialty glasses, ceramics, and related materials worldwide. The company operates in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences. The Display Technologies segment manufactures glass substrates for liquid crystal displays (LCDs) for notebook computers, flat panel desktop monitors, and LCD televisions. The Telecommunications segment produces optical fiber and cable, and hardware and equipment products, including cable assemblies, fiber optic hardware, fiber optic connectors, optical components and couplers, closures and pedestals, splice and test equipment, and other accessories for optical connectivity to the telecommunications industry.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
No comments:
Post a Comment