8 Cash-Comfortable Stocks Under $5

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Lower-priced stocks may look attractively valued, but they often belong to very young companies with a short or non-existent history of operations. One way to pick the better from the worse is by comparing their cash holdings to their operating expenses – this can measure sustainability even for young companies.

Here we did just that, screening for stocks between $1 and $5 that have high cash holdings relative to their average quarterly expense over the last year. The screen produced 8 stocks, listed below.

Note that many of these companies are not yet producing revenues, so this measure of sustainability is not for normal operations, but rather for a timeline to generate a line of operations. In some cases, operations have already been established.


Do you think these companies will flourish? Use this list as a starting-off point for your own analysis.

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1. Access a thorough description of all companies mentioned

2. Compare analyst ratings for all stocks mentioned below 

3. Visualize market cap changes for the top stocks mentioned

List sorted by cash to average quarterly operating expense.

1. Hyperdynamics Corporation (HDY): Oil & Gas Drilling & Exploration Industry. Market cap of $644.57M. Price at $4.12. Current cash holdings at $158.04M vs. average quarterly operating expenses over the last four quarters at $2.71M. Cash/Avg. Quarterly Operating Expense at 58.37, i.e. the company can pay 58.37 quarters worth of average quarterly operating expense without needing to generate revenue. This is a risky stock that is significantly more volatile than the overall market (beta = 2.44). The stock is a short squeeze candidate, with a short float at 11.79% (equivalent to 5.43 days of average volume). It's been a rough couple of days for the stock, losing 11.97% over the last week. The stock has had a good month, gaining 24.1%.

2. ADPT Corp (ADPT): Computer Based Systems Industry. Market cap of $351.31M. Price at $2.92. Current cash holdings at $349.59M vs. average quarterly operating expenses over the last four quarters at $11.04M. Cash/Avg. Quarterly Operating Expense at 31.67, i.e. the company can pay 31.67 quarters worth of average quarterly operating expense without needing to generate revenue. The stock has lost 1.68% over the last year.

3. Augusta Resource Corp. (AZC): Industrial Metals & Minerals Industry. Market cap of $619.01M. Price at $4.34. Current cash holdings at $31.51M vs. average quarterly operating expenses over the last four quarters at $1.52M. Cash/Avg. Quarterly Operating Expense at 20.73, i.e. the company can pay 20.73 quarters worth of average quarterly operating expense without needing to generate revenue. This is a risky stock that is significantly more volatile than the overall market (beta = 2.11). The stock has gained 159.88% over the last year.

4. General Moly, Inc. (GMO): Industrial Metals & Minerals Industry. Market cap of $392.0M. Price at $4.32. Current cash holdings at $64.31M vs. average quarterly operating expenses over the last four quarters at $4.46M. Cash/Avg. Quarterly Operating Expense at 14.41, i.e. the company can pay 14.41 quarters worth of average quarterly operating expense without needing to generate revenue. This is a risky stock that is significantly more volatile than the overall market (beta = 2.85). It's been a rough couple of days for the stock, losing 6.09% over the last week.

5. Avanir Pharmaceuticals (AVNR): Drug Manufacturers - Other Industry. Market cap of $517.50M. Price at $4.17. Current cash holdings at $103.05M vs. average quarterly operating expenses over the last four quarters at $11.52M. Cash/Avg. Quarterly Operating Expense at 8.94, i.e. the company can pay 8.94 quarters worth of average quarterly operating expense without needing to generate revenue. This is a risky stock that is significantly more volatile than the overall market (beta = 2.41). It's been a rough couple of days for the stock, losing 10.71% over the last week.

6. Opko Health, Inc. (OPK): Medical Appliances & Equipment Industry. Market cap of $1.0B. Price at $3.51. Current cash holdings at $107.86M vs. average quarterly operating expenses over the last four quarters at $13.96M. Cash/Avg. Quarterly Operating Expense at 7.72, i.e. the company can pay 7.72 quarters worth of average quarterly operating expense without needing to generate revenue. The stock is a short squeeze candidate, with a short float at 7.43% (equivalent to 5.64 days of average volume). It's been a rough couple of days for the stock, losing 6.9% over the last week.

7. GenOn Energy, Inc. (GEN): Electric Utilities Industry. Market cap of $3.02B. Price at $3.91. Current cash holdings at $3.20B vs. average quarterly operating expenses over the last four quarters at $523.61M. Cash/Avg. Quarterly Operating Expense at 6.11, i.e. the company can pay 6.11 quarters worth of average quarterly operating expense without needing to generate revenue.

8. Geron Corporation (GERN): Biotechnology Industry. Market cap of $545.63M. Price at $4.23. Current cash holdings at $163.33M vs. average quarterly operating expenses over the last four quarters at $30.80M. Cash/Avg. Quarterly Operating Expense at 5.30, i.e. the company can pay 5.30 quarters worth of average quarterly operating expense without needing to generate revenue. The stock is a short squeeze candidate, with a short float at 10.53% (equivalent to 9.07 days of average volume). The stock is currently stuck in a downtrend, trading 8.74% below its SMA20, 12.39% below its SMA50, and 17.67% below its SMA200. The stock has performed poorly over the last month, losing 12.42%.

Cash and operating expense sourced from Google Finance, all other data sourced from Finviz. Data sourced on June 6th.



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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