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Enhance Your Investment Portfolio with These 4 Top-Performing Liquid Stocks

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Unveiling Lucrative Investment Opportunities

Investors often face a daunting task when it comes to pinpointing stocks that promise substantial returns. However, an aspect that can guide them towards potential winners is liquidity levels. A company’s liquidity showcases its financial stability by reflecting its capability to satisfy short-term debt commitments through liquid cash and equivalents.

Identifying the Best Liquid Stocks

When eyeing stocks with high liquidity, caution is paramount. While a robust liquidity position is appealing, it could signify a company’s inefficiency in asset utilization. It is crucial to strike a balance by examining a company’s liquidity alongside its efficiency to unearth promising investment opportunities.

Ways to Assess Liquid Stocks

Current Ratio: A metric that evaluates current assets in comparison to current liabilities, the current ratio denotes a firm’s ability to fulfill short- and long-term debt obligations. An ideal current ratio falls within the 1-3 range, highlighting a balanced financial standing.

Quick Ratio: This ratio, also known as the ‘acid-test ratio,’ assesses a company’s capability to settle short-term liabilities. A quick ratio exceeding 1 mirrors a positive scenario akin to the current ratio.

Cash Ratio: The most conservative measure among the three, the cash ratio analyzes the liquidity from cash and cash equivalents in meeting current liabilities. While a cash ratio exceeding 1 is favorable, an excessively high figure might indicate inefficiencies in cash deployment.

Striking a ratio greater than 1 remains desirable, yet it doesn’t always indicate a robust financial status.

Criteria for Screening Liquid Stocks

In the pursuit of cherry-picking top-tier options, factors such as asset utilization — reflecting a company’s operational efficiency — play a pivotal role in the screening process. A firm’s capacity to convert total sales over the past 12 months into average total assets over the last four quarters is crucial in identifying efficiency.

For added assurance, our unique Growth Style Score is integrated into the screening mechanism to cull out liquid, efficient stocks tailored for strong growth prospects.

Requisite Criteria:

– Current Ratio, Quick Ratio, and Cash Ratio falling between 1 and 3 (While ratios above 1 are favored, excessively high ratios may hint at inefficiencies.)

– Asset utilization surpassing the industry average (Outperforming industry benchmarks signifies operational efficiency.)

– Zacks Rank matching #1 (Reserved exclusively for Strong Buy-rated stocks).

– Growth Score less than or equal to B (Proven to outperform in back-testing compared to other stocks with a Growth Score of A or B under Zacks Rank #1 or 2.)

These stringent criteria have sieved through a vast pool of over 7,700 stocks, leaving only 13 top contenders.

Among them, here are four standout stocks:

Meta Platforms, Inc: META stands as the unrivaled juggernaut in the social media realm. Its exponential user base growth, especially in the Asia Pacific region, underscores a promising trajectory. Leveraging AI to fuel user engagement across platforms like Instagram, WhatsApp, Messenger, and Facebook further solidifies its prospects. Challenging macroeconomic landscapes pose a mild setback to its advertising revenues. Notably, analysts forecast earnings of $19.94 per share for 2024, marking a 13.2% uptick in the past 60 days. META boasts a Growth Score of B and a remarkable trailing four-quarter earnings surprise averaging 19.7%.

Deckers Outdoor Corporation: DECK distinguishes itself as a premier designer, producer, and custodian of innovative footwear and accessories tailored for outdoor pursuits. Its stellar showcasing under key brands like UGG and HOKA drives robust revenue performance. Strategic initiatives like product innovation and bolstering direct-to-consumer channels are ramping up its growth trajectory. DECK projects a fiscal 2024 bottom line of $26.85 per share, up 13.7% in the previous 60 days. The company flaunts a Growth Score of A and an impressive 32.1% average earnings surprise over the last four quarters.

Perion Network: PERI, a tech entity hailing from Israel, extends cutting-edge online advertising and search monetization solutions to brands and publishers. Steadfast on data-centric executions, PERI’s suite ranges from impactful ad formats to branded search solutions, fostering a unified social and mobile programmatic platform. Analysts anticipate earnings of $3.34 per share for 2024, reflecting a 2-cent climb over the last 60 days. The company boasts a Growth Score of B and a commendable trailing four-quarter earnings surprise standing at 12.9%, on average.

Carlisle Companies Incorporated: CSL boasts a diverse global portfolio of high-margin product brands and businesses, specializing in engineered roofing and waterproofing solutions. CSL’s innovation-driven approach in delivering novel products positions it for growth. The company anticipates earnings of $18.44 per share in 2024, marking an 8.2% enhancement over the past 60 days. CSL secures a Growth Score of B and a robust trailing four-quarter earnings surprise averaging 7.6%.

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Disclosure: Zacks Investment Research’s officers, directors, and staff may possess, have shorted, or have long or short positions in the securities and options mentioned in this article. An affiliate investment advisory firm could also hold, have shorted, or have long or short positions in the options and securities discussed here.

Transparency Note: Detailed information on Zacks’ portfolio and strategy performance can be accessed at: https://www.zacks.com/performance.

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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

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Information sourced from Zacks Investment Research

The perspectives presented in this publication solely reflect those of the author, and they may not entirely align with Nasdaq, Inc.’s viewpoints.