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Alberto Abaterusso
Alberto Abaterusso
Articles (2376) 

3 High-Quality Stocks for the Value Investor

These companies have robust balance sheets

May 19, 2020 | About:

To have a higher chance to uncover high-quality companies, Benjamin Graham, the pioneer of value investing, suggested choosing stocks with a current ratio of more than two and higher working capital than long-term debt.

These two metrics indicate whether the company can generate enough financial resources to support the business and reimburse both short-term and long-term lenders.

The current ratio is calculated by dividing total current assets by total current liabilities, while the working capital is the difference between total current assets and total current liabilities.

Atrion Corp

Atrion Corp (NASDAQ:ATRI) is an Allen, Texas-based global manufacturer and seller of pharmaceutical instruments that are used for applications in several medical branches, including cardiovascular and ophthalmology.

The stock has a current ratio of 9.88, which is much better than the industry median of 2.52.

Atrion Corp has a trailing 12-month working capital of $121.06 million and no long-term debt as of the most recent full fiscal year.

GuruFocus assigned the highest rating of 10 out of 10 for the company’s financial strength and the near the top rating of 9 out of 10 for its profitability.

Atrion Corp was trading at a share price of $648.07 at close on Monday for a market capitalization of $1.19 billion, a price-book ratio of 5.13 and a 52-week range of $579 to $922.80.

Sturm Ruger & Co Inc

Sturm Ruger & Co Inc (NYSE:RGR) is a Southport, Connecticut-based manufacturer and seller of firearms in the United States.

The stock has a current ratio of 4.23, which is much better than the industry median of 1.54.

Sturm Ruger & Co has a trailing 12-month working capital of about $188.07 million and no long-term debt as of the most recent full fiscal year.

GuruFocus assigned the near the top rating of 9 out of 10 for both the company’s financial strength and its profitability.

Sturm Ruger & Co was trading at a share price of $57.99 at close on Monday for a market capitalization of $1.01 billion, a price-book ratio of 3.45 and a 52-week range of $38.44 to $60.35.

Chase Corp

Chase Corp (CCF) is a Westwood, Massachusetts-based global manufacturer and seller of protective chemicals for various applications.

The stock has a current ratio of 6.31, which is much better than the industry median of 1.85.

Chase has a trailing 12-month working capital of $111.94 million and no long-term debt as of the most recent full fiscal year.

GuruFocus assigned a high rating of 9 out of 10 for the company’s financial strength and a high rating of 8 out of 10 for its profitability.

Chase Corp was trading at a share price of $94.02 at close on Monday for a market capitalization of $888.36 million, a price-book ratio of 3.15 and a 52-week range of $52 to $127.50.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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