Published on 7 Jul 2023 on Zacks via Yahoo Finance
Building a portfolio with favorable liquidity stocks will likely work in favor of investors seeking healthy returns.
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.
One needs to exercise caution before investing in such stocks. High liquidity may indicate that the company is clearing its dues faster than its peers. However, this may also suggest that the company cannot utilize its assets competently.