4 Top-Performing Liquid Stocks to Strengthen Portfolio Returns

Investors looking for solid gains will likely benefit from adding stocks with sound liquidity, which encourages business growth. Liquidity measures a company’s capability to meet its short-term debt obligations. Stocks with high liquidity levels have always been in demand, owing to their potential to provide maximum returns.

Investors may want to consider adding four top-ranked stocks, such as Avino Silver & Gold Mines Ltd. ASM, CommScope Holding Company, Inc. COMM, EverQuote, Inc. EVER and Willdan Group, Inc. WLDN to their portfolio to boost returns.

However, it's important to exercise caution. While high liquidity can indicate that a company is efficiently managing its short-term obligations, it may also suggest underutilization of resources. In some cases, companies with excess liquidity may not be deploying their assets effectively, which could limit growth potential.

Hence, one may consider a company’s efficiency level in addition to its liquidity while identifying prospective winners. A balanced assessment of both liquidity and efficiency can help identify truly promising investment opportunities.

Measures to Identify Liquid Stocks

Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company’s potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. A high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.

Quick Ratio: Unlike the current ratio, the quick ratio — the “acid-test ratio” or “quick assets ratio” — indicates a company’s ability to pay short-term obligations. It considers inventory, excluding current assets relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.

Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company’s ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.

A ratio greater than 1 is always desirable but may not always represent a company’s financial condition.

Screening Parameters

To pick the best of the lot, we have added asset utilization — a widely used measure of a company’s efficiency — as one of the screening criteria. Asset utilization is the ratio of total sales in the past 12 months to the last four-quarter average of total assets. Though this ratio varies across industries, companies with a ratio higher than their industries can be considered efficient.

We added our proprietary Growth Score to the screen to ensure these liquid and efficient stocks have solid growth potential.

Current Ratio, Quick Ratio, and Cash Ratio between 1 and 3: While liquidity ratios greater than 1 are desirable, significantly high ratios may indicate inefficiency.

Asset utilization is more significant than the industry average: Higher asset utilization than the industry average indicates a company’s efficiency.

Zacks Rank equal to #1: Only Strong Buy-rated stocks can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.

Growth Score less than or equal to B: Back-tested results show that stocks with a Growth Score of A or B handily beat other stocks when combined with a Zacks Rank #1 or 2 (Buy).

These criteria have narrowed the universe of more than 7,700 stocks to only seven.

Here are four of the seven stocks that qualified the screen:

Avino Silver & Gold Mines is a Canada-based company involved in the exploration, development, and production of silver, copper, gold, and base metals.

ASM recently announced first-quarter 2025 production results with silver equivalent production increasing 8% year over year. Gold production jumped 25% while copper production was up 19% year over year. The company will report detailed quarterly results on May 13. In the fourth quarter of 2024, ASM’s revenues surged 95% year over year to $24 million. The top line beat the Zacks Consensus Estimate of $18 million. The upside was driven by higher production, and realized silver and gold prices.

ASM reported earnings per share of 7 cents for fourth-quarter 2024, which surpassed the Zacks Consensus Estimate of 3 cents per share. The company posted earnings of 2 cents in the year-ago quarter.

The Zacks Consensus Estimate for 2025 earnings is pegged at 7 cents per share, unchanged in the past seven days. ASM has a Growth Score of A and a trailing four-quarter earnings surprise of 94.4%, on average.

CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks.

The company is well-positioned to benefit from the growing demand for 5G, supported by its cost-saving initiatives and the recent launch of HELIAX SkyBlox. The divestiture of the OWN segment has further enabled it to focus on its core portfolio and strengthen its CommScope NEXT initiatives. Healthy demand in the hyperscale and cloud business is a tailwind.

In the last reported quarter, revenues came in at $1.17 billion, improving from $923.1 million a year ago, driven by stronger sales in all segments. Revenues surpassed the Zacks Consensus Estimate by $59 million. Non-GAAP net income was $48.3 million or 18 cents per share against a net loss of $73.1 million or 34 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 14 cents.

The Zacks Consensus Estimate for 2025 earnings is pegged at 89 cents per share, unchanged in the past seven days. COMM has a Growth Score of A and a trailing four-quarter earnings surprise of 73%, on average.

EverQuote, headquartered in Cambridge, MA, is an online insurance marketplace. The company's websites allow consumers to shop for auto, home, renters and life insurance.

EverQuote is gaining from its exclusive data assets and technology, deepened focus on core P&C markets and a robust financial profile. It is also focused on streamlining traffic operations, boosting AI-powered bidding solutions and rolling out advanced agent technology platforms, which position it well for long-term growth. Recovery in automotive and other insurance verticals, given auto carrier recovery and growth in revenue per quote request, bodes well. In the last reported quarter, total revenues of $147.5 million increased 164.8% year over year. Revenues in the Automotive insurance vertical increased 200% year over year to $135.9 million. Revenues in the Home and Renters insurance vertical totaled $11.3 million, which increased 15% year over year.

The Zacks Consensus Estimate for EVER’s 2025 earnings is pegged at $1.20 per share, unchanged in the past seven days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 160.7%, on average.

Willdan Group provides technical, professional and consulting services to utilities, private industry and public agencies. The company has a comprehensive product portfolio encompassing energy policy planning and advisory services, energy efficiency and sustainability, engineering and planning, electric grid solutions, and municipal financial consulting services.

The strengthening electric load growth trend, driven by higher electricity demand at data centers owing to the proliferation of artificial intelligence, bodes well. For 2024, Willdan reported contract revenues of $565.8 million, up 10.9% from the fiscal 2023 level. Also, the acquisition of Alternative Power Generation, Inc. expanded Willdan’s electrical engineering and management consulting capabilities, especially in substations for data centers and renewables.

The Zacks Consensus Estimate for WLDN’s 2025 earnings is pegged at $2.75 per share, unchanged in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 66.1%, on average.

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Disclosure: Officers, directors and employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies is available at: https://www.zacks.com/performance.

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