14 High-Growth Companies with Cash to Cover 1+ Years of Operating Expenses

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One of the main concerns for investing in high-growth companies is whether they can sufficiently fund new projects as they come along. In this case, large cash holdings can help put potential investors at ease.

Here we present a list of 14 high-growth stocks, with projected EPS growth over the next 5 years above 20%. These stocks also have large cash holdings relative to their average quarterly operating expense over the last year – all stocks listed have more than 4 times the amount of cash for their average quarterly operating expense, translating into coverage of more than 4 quarters of expenses.

Do you think these companies are going to live up to their projected EPS growth rates? Use this list as a starting-off point for your own analysis.

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List sorted by cash/average quarterly operating expense.

1. Molycorp, Inc. (MCP): Industrial Metals & Minerals Industry. Market cap of $4.95B. Projected EPS growth over next five years at 43.00%. Current cash holdings at $492.50M vs. average quarterly operating expenses over the last four quarters at $25.20M. Cash/Avg. Quarterly Operating Expense at 19.55, i.e. the company can pay 19.55 quarters worth of average quarterly operating expense without needing to generate revenue. After a solid performance over the last year, MCP has pulled back during recent sessions. The stock is 15.6% below its SMA20 and 4.92% below its SMA50, but remains 43.4% above its SMA200. The stock has performed poorly over the last month, losing 20.52%.

2. Youku.com Inc (YOKU): Internet Information Providers Industry. Market cap of $4.99B. Projected EPS growth over next five years at 45.00%. Current cash holdings at $1.73B vs. average quarterly operating expenses over the last four quarters at $154.29M. Cash/Avg. Quarterly Operating Expense at 11.18, i.e. the company can pay 11.18 quarters worth of average quarterly operating expense without needing to generate revenue. After a solid performance over the last year, YOKU has pulled back during recent sessions. The stock is 18.28% below its SMA20 and 10.17% below its SMA50, but remains 10.91% above its SMA200. The stock has performed poorly over the last month, losing 21.17%.


3. Baidu, Inc. (BIDU): Internet Information Providers Industry. Market cap of $45.94B. Projected EPS growth over next five years at 56.70%. Current cash holdings at $8.64B vs. average quarterly operating expenses over the last four quarters at $1.11B. Cash/Avg. Quarterly Operating Expense at 7.80, i.e. the company can pay 7.80 quarters worth of average quarterly operating expense without needing to generate revenue. After a solid performance over the last year, BIDU has pulled back during recent sessions. The stock is 8.3% below its SMA20 and 3.83% below its SMA50, but remains 18.71% above its SMA200. The stock has performed poorly over the last month, losing 10.22%.


4. Ctrip.com International Ltd. (CTRP): Consumer Services Industry. Market cap of $6.34B. Projected EPS growth over next five years at 27.25%. Current cash holdings at $3.33B vs. average quarterly operating expenses over the last four quarters at $456.78M. Cash/Avg. Quarterly Operating Expense at 7.30, i.e. the company can pay 7.30 quarters worth of average quarterly operating expense without needing to generate revenue. It's been a rough couple of days for the stock, losing 9.13% over the last week.

5. Acme Packet, Inc. (APKT): Communication Equipment Industry. Market cap of $4.69B. Projected EPS growth over next five years at 23.90%. Current cash holdings at $288.83M vs. average quarterly operating expenses over the last four quarters at $44.88M. Cash/Avg. Quarterly Operating Expense at 6.44, i.e. the company can pay 6.44 quarters worth of average quarterly operating expense without needing to generate revenue. It's been a rough couple of days for the stock, losing 8.17% over the last week.

6. Illumina Inc. (ILMN): Biotechnology Industry. Market cap of $8.95B. Projected EPS growth over next five years at 26.16%. Current cash holdings at $1.13B vs. average quarterly operating expenses over the last four quarters at $187.58M. Cash/Avg. Quarterly Operating Expense at 6.05, i.e. the company can pay 6.05 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has a relatively low correlation to the market (beta = 0.46), which may be appealing to risk-averse investors. The stock is a short squeeze candidate, with a short float at 17.31% (equivalent to 11.22 days of average volume). The stock has gained 75.76% over the last year.

7. United Therapeutics Corp. (UTHR): Drug Manufacturers - Other Industry. Market cap of $3.78B. Projected EPS growth over next five years at 51.64%. Current cash holdings at $683.41M vs. average quarterly operating expenses over the last four quarters at $117.98M. Cash/Avg. Quarterly Operating Expense at 5.79, i.e. the company can pay 5.79 quarters worth of average quarterly operating expense without needing to generate revenue. Risk-averse investors may appreciate that UTHR has a relatively low correlation to the market (beta = 0.6). The stock is a short squeeze candidate, with a short float at 10.22% (equivalent to 9.43 days of average volume).

8. VMware, Inc. (VMW): Technical & System Software Industry. Market cap of $38.07B. Projected EPS growth over next five years at 23.92%. Current cash holdings at $3.66B vs. average quarterly operating expenses over the last four quarters at $647.06M. Cash/Avg. Quarterly Operating Expense at 5.66, i.e. the company can pay 5.66 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has gained 51.82% over the last year.

9. Cree Inc. (CREE): Semiconductor Equipment & Materials Industry. Market cap of $4.30B. Projected EPS growth over next five years at 20.81%. Current cash holdings at $1.07B vs. average quarterly operating expenses over the last four quarters at $198.04M. Cash/Avg. Quarterly Operating Expense at 5.42, i.e. the company can pay 5.42 quarters worth of average quarterly operating expense without needing to generate revenue. The stock is a short squeeze candidate, with a short float at 22.6% (equivalent to 6.3 days of average volume). The stock has lost 45.83% over the last year.

10. New Oriental Education & Technology Group (EDU): Education & Training Services Industry. Market cap of $4.51B. Projected EPS growth over next five years at 26.50%. Current cash holdings at $503.90M vs. average quarterly operating expenses over the last four quarters at $95.64M. Cash/Avg. Quarterly Operating Expense at 5.27, i.e. the company can pay 5.27 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has gained 24.25% over the last year.

11. Nomura Holdings Inc. (NMR): Investment Brokerage - National Industry. Market cap of $18.37B. Projected EPS growth over next five years at 23.10%. Current cash holdings at $1,620.34B vs. average quarterly operating expenses over the last four quarters at $323.06B. Cash/Avg. Quarterly Operating Expense at 5.02, i.e. the company can pay 5.02 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has lost 20.19% over the last year.

12. Rovi Corporation (ROVI): Multimedia & Graphics Software Industry. Market cap of $6.45B. Projected EPS growth over next five years at 20.13%. Current cash holdings at $556.52M vs. average quarterly operating expenses over the last four quarters at $113.56M. Cash/Avg. Quarterly Operating Expense at 4.90, i.e. the company can pay 4.90 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has had a couple of great days, gaining 14.96% over the last week.

13. Intuitive Surgical, Inc. (ISRG): Medical Appliances & Equipment Industry. Market cap of $13.75B. Projected EPS growth over next five years at 20.85%. Current cash holdings at $1.09B vs. average quarterly operating expenses over the last four quarters at $224.65M. Cash/Avg. Quarterly Operating Expense at 4.85, i.e. the company can pay 4.85 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has gained 5.25% over the last year.

14. Red Hat, Inc. (RHT):Application Software Industry. Market cap of $8.72B. Projected EPS growth over next five years at 20.17%. Current cash holdings at $860.60M vs. average quarterly operating expenses over the last four quarters at $190.90M. Cash/Avg. Quarterly Operating Expense at 4.51, i.e. the company can pay 4.51 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has gained 50.42% over the last year.

Cash and avg. quarterly operating expense sourced from Google Finance, all other data sourced from Finviz. Data sourced on May 17th



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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