Skip to main content

Cool cash sets these 5 stocks apart

Today's screen looks at cool cash or, more precisely, cash plus cash equivalents plus short term investments. These are classic balance sheet entries.

The screen actually identifies those stocks whose Cash on Hand, as defined above, is greater than 50% of it's market value. The screen then does a cross-reference with those stocks that just recently joined the TradeRadar Trend Leaders list. The result is in the table below:

Symbol Name Market Cap PE Price To Sales Price To Book Debt To Equity Cash On Hand Dividend
AFP UNITED CAPITAL CORP. $211,300,000 31.91 3.85 1.12 0.1428 $147,530,000 $0.00
GFIG GFI Group Inc. $652,600,000 39.63 0.79 1.25 0.1182 $327,280,000 $0.20
AAWW Atlas Air Worldwide Holdings $951,100,000 8.3 0.87 1.26 0.8096 $637,070,000 $0.00
ISH INTL SHIPHOLDING CORP. $208,200,000 4.88 0.55 0.9 0.4375 $120,090,000 $2.00
SONO SonoSite, Inc. $514,000,000 162.35 2.27 2.02 0.3641 $257,750,000 $0.00

The data was gathered over the weekend via the Alert HQ process so a few of these values may be slightly different if you look them up today.

Why is this interesting? Because when you buy a share of one of these stocks, you are not only participating in the growth potential of the stock but you are also protecting yourself from owning the kind of over-leveraged company that suffered so much during the Great Recession. Cash is a buffer, a kind of safety net in bad times. A large cash horde can also be a piggy bank that a company can rely on rather than tapping the debt markets -- the expectation being that debt is something that will become less and less attractive as interest rates begin to rise later this year or next year.

So looking at the table above, you can see that all of these companies have rather low debt to equity ratios. Not only that, as members of the Trend Leaders list they are all exhibiting strong up-trends in their stock prices. The result is momentum and safety rolled into one. Not a bad combination.

As the focus stock for today, I'll take a closer look at the stock that appears to offer the greatest value: INTL SHIPHOLDING CORP. (ISH). With the lowest PE, the lowest Price to Sales ratio and the highest dividend, this stock appears to have a significant margin of safety. The company operates a fleet of ships including types that transport cars and trucks as well as tankers, container and bulk carriers.

As further evidence of its value, the company's Enterprise Value/EBITDA ratio is a mere 4.3 and its dividend yield is a high 6.8%. In terms of financial results, the company is riding the trend of slow improvement in the global economy. Revenue is down a bit sequentially but up strongly year-over-year. Net Income has been increasing steadily since hitting a low point in Q4-2008.

Explore more ISH Data at Wikinvest

As mentioned above, this stock is on the Trend Leaders list. That means that Aroon, MACD and Wilder's DMI are all reasonably bullish. Here is the stock chart:

You can see that the stock has surged upward through resistance in the $28 range and is now above both the 50-day moving average and the 200-day moving average. In late January, the company reported a doubling in earnings compared to the year ago quarter but it didn't do anything to arrest the slide in the stock price. Early in February, however, investors seem to have reconsidered and the stock has been on a tear ever since.

Conclusion --

It can be said that cash makes things interesting. Here are five stocks that manage to combine outstanding price performance with a comforting level of cash. Dig into this list and see if you don't find some compelling value mixed with a good dollop of momentum.

Disclosure: no positions in any stocks mentioned in this post


Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what