“Cash is king,” may be an age-old saying, but its wisdom is timeless. In the world of business, having a strong cash reserve is an extremely ideal situation for any company across any industry. Cash helps pay the bills, fuel growth through capital expenditures, pay dividends, mergers & acquisitions, and more. Furthermore, the larger a company’s cash reserves, the less risk there is (theoretically) to bankruptcy, assuming normal business operations.
Cash holdings become increasingly important as business cycles near a change. With the longest bull market in U.S. history continuing to slowly move along, a growing number of economists and financial experts are seeing a greater risk for an upcoming recession. Liquid assets like cash become a life-line for companies as they grapple with changing economic environments, which could impact bottom-line profitability. While cash holdings are by no means a “silver bullet” during a recessionary period, it does provide companies with slightly more flexibility to act and pivot where needed.
With the global economy continuing to show early signs of a slowdown, here are four NASDAQ smallcaps with ample cash reserves and strong balance sheets:
Synaptics, Inc. (NASDAQ: SYNA)
Synaptics, Inc. is engaged within the research, development, marketing, and sale of human interface solutions for mobile & electronic devices and products. The company’s ClearView products provide advanced image processing capabilities and low-power technology, which is geared towards entry-level smartphones. TouchView products utilize touch-enabled technology for displays. AudioSmart is the voice and audio solutions, Natural ID allows for fingerprint ID to lock and unlock devices, and more.
During the first quarter 2019, Synaptics reported total cash of $323.80 million, which equates to a cash per share of 9.44. The company has no short-term debt holdings, but does hold $446.5 million in long-term debt. Overall, Synaptics reported total assets of $1.47 billion versus $741.90 million in total liabilities during Q1 2019.
Arena Pharmaceuticals, Inc. (NASDAQ: ARNA)
Arena Pharmaceuticals is engaged within the research, development, testing, and commercialization of biopharmaceutical treatments that seek to assist with a variety of ailments, such as immune & inflammation conditions, gastrointestinal pain, heart failure and more. Arena Pharmaceuticals is also working on medical marijuana-based treatments, which is centered around the company’s APD371 platform.
The biotechnology company reported cash & short-term investments of $1.1 billion, which included $727.4 million in cash specifically. This gives the company a massive cash per share ratio of 22.32. Arena Pharmaceuticals reported short-term debt of $3.41 million and long-term debt of $48.54 million. Overall, Arena reported total assets of $1.33 billion and total liabilities of $86.62 million, during the first quarter 2019.
Zumiez, Inc. (NASDAQ: ZUMZ)
Zumiez, Inc. is a specialty teen retailer, which focuses on apparel, footwear, accessories, sporting goods, equipment, and more. As of March 2019, Zumiez had 705 total stores, including 606 stores in the U.S., 50 in Canada, 41 stores in Europe, 8 stores in Australia.
The teen retailer reported total cash & short-term investments of $167.98 million, including $60.62 million in cash during the fiscal first quarter 2019. This gives the company a cash per share ratio of 7.45. Zumiez reported no short-term or long-term debt. Overall, Zumiez reported total assets of $834.74 million and total liabilities of $440.78 million, during the fiscal first quarter ending April 30, 2019.
Dicerna Pharmaceuticals, Inc. (NASDAQ: DRNA)
Dicerna Pharmaceuticals is engaged within the research, development, and commercialization of ribonucleic acid interference (RNAi)-based pharmaceutical treatments. Using its proprietary GalXC RNAi platform, which is designed to treatment liver diseases, rare & viral infectious diseases, chronic liver ailments, and cardiovascular diseases. Dicerna’s primary treatments include: DCR-PHXC for hyperoxaluria, DCR-HBVS for hepatitis B infections, and an undisclosed treatment for liver disease.
During the first quarter 2019, Dicerna Pharmaceuticals reported total cash & short-term investments of $371.20 million, including $160.14 million in cash. Cash per share comes in at 5.52 for Dicerna. The biopharmaceutical developer reported short-term debt of $1.75 million and long-term debt of $1.38 million, during the first quarter. Overall, total assets came out to $383.99 million and total liabilities arrived at $204.36 million, through the end of March 2019.
Disclaimer: The author and Spotlight Growth have no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
