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5 Stocks With Increasing Cash Flows to Enrich Your Portfolio
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Cash is the lifeblood of any business. It offers the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. In fact, it holds the key to a company’s existence, development and success, and indicates its true financial health.
Before investing in the right stocks, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows. Because even a profitable business can succumb to failure if its cash flow is uneven and eventually, file for bankruptcy. However, one can effectively judge a company’s resilience by looking at its efficiency in generating cash flows. This is because cash not only shields it from market mayhem, but also indicates that profits are being channelized in the right direction.
Particularly, uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns that resulted from the coronavirus pandemic has all the more established the relevance of analyzing a company’s cash-generating efficiency.
To figure out this efficiency, one needs to consider a company’s net cash flow. While in any business cash moves in and out, it is net cash flow that explains how much money a company is actually generating.
If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in business, endure downturns and finally return wealth to shareholders. On the other hand, a negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, having a positive cash flow merely does not secure a company’s future growth. To ride on the growth curve, a company must have its cash flow increasing because that indicates management’s efficiency in regulating its cash movements and less dependency on outside financing for running its business.
Therefore, keep yourself abreast with the following screen to bet on stocks with rising cash flows.
Screening Parameters:
To find stocks that have seen increasing cash flow over time, we ran the screen for those whose cash flow in the latest reported quarter was at least equal to or greater than the 5-year average cash flow per common share. This implies a positive trend and increasing cash over a period of time.
In addition to this we chose:
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.
Current Price greater than or equal to $5: This sieves out low-priced stocks.
VGM Score of B or better: This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their individual industry categories.
Here are the five out of the 11 stocks that qualified the screening:
Matson Inc. (MATX - Free Report) provides ocean transportation and logistics services. It offers shipping services in Hawaii, Guam and Micronesia islands, and expedited services from China to Southern California. At present, the stock has a VGM Score of A. The Zacks Consensus Estimate of $5.49 for 2021 earnings has been revised 22.3% upward over the past month.
Piper Sandler Companies (PIPR - Free Report) is a focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected sectors of the financial services marketplace. The stock currently flaunts a VGM Score of A. The Zacks Consensus Estimate for current-year earnings has been revised upward to $10.05 from $8.15 in 60 days’ time.
Century Communities, Inc. (CCS - Free Report) is a home building and construction company. Its activities comprise land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. The stock currently has a VGM Score of A. The Zacks Consensus Estimate for the ongoing-year earnings has moved up to $8.32 from $6.02 in the past 60 days.
L.B. Foster Company (FSTR - Free Report) is engaged in the manufacture, fabrication and distribution of rail and trackwork, piling, highway products and tubular products. It also sells and rents steel sheet piling and H-bearing pile for foundation and earth retention requirements in the construction industry. For tubular markets, Foster supplies pipe and pipe coatings for pipelines and produces pipe-related products for special markets.This company has a VGM Score of A, at present. The Zacks Consensus Estimate of 92 cents for this year’s earnings has moved 8.2% north in 30 days’ time.
Select Medical Holdings Corporation (SEM - Free Report) is a healthcare company, which owns long-term acute care and inpatient rehabilitation hospitals as well as occupational health and physical therapy clinics. The stock currently sports a VGM Score of A. The Zacks Consensus Estimate for its 2021 earnings has been revised upward to $2.23 from $1.51 in the past 30 days.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or 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 that are mentioned in this material.
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5 Stocks With Increasing Cash Flows to Enrich Your Portfolio
Cash is the lifeblood of any business. It offers the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. In fact, it holds the key to a company’s existence, development and success, and indicates its true financial health.
Before investing in the right stocks, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows. Because even a profitable business can succumb to failure if its cash flow is uneven and eventually, file for bankruptcy. However, one can effectively judge a company’s resilience by looking at its efficiency in generating cash flows. This is because cash not only shields it from market mayhem, but also indicates that profits are being channelized in the right direction.
Particularly, uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns that resulted from the coronavirus pandemic has all the more established the relevance of analyzing a company’s cash-generating efficiency.
To figure out this efficiency, one needs to consider a company’s net cash flow. While in any business cash moves in and out, it is net cash flow that explains how much money a company is actually generating.
If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in business, endure downturns and finally return wealth to shareholders. On the other hand, a negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, having a positive cash flow merely does not secure a company’s future growth. To ride on the growth curve, a company must have its cash flow increasing because that indicates management’s efficiency in regulating its cash movements and less dependency on outside financing for running its business.
Therefore, keep yourself abreast with the following screen to bet on stocks with rising cash flows.
Screening Parameters:
To find stocks that have seen increasing cash flow over time, we ran the screen for those whose cash flow in the latest reported quarter was at least equal to or greater than the 5-year average cash flow per common share. This implies a positive trend and increasing cash over a period of time.
In addition to this we chose:
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.
Current Price greater than or equal to $5: This sieves out low-priced stocks.
VGM Score of B or better: This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their individual industry categories.
Here are the five out of the 11 stocks that qualified the screening:
Matson Inc. (MATX - Free Report) provides ocean transportation and logistics services. It offers shipping services in Hawaii, Guam and Micronesia islands, and expedited services from China to Southern California. At present, the stock has a VGM Score of A. The Zacks Consensus Estimate of $5.49 for 2021 earnings has been revised 22.3% upward over the past month.
Piper Sandler Companies (PIPR - Free Report) is a focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected sectors of the financial services marketplace. The stock currently flaunts a VGM Score of A. The Zacks Consensus Estimate for current-year earnings has been revised upward to $10.05 from $8.15 in 60 days’ time.
Century Communities, Inc. (CCS - Free Report) is a home building and construction company. Its activities comprise land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. The stock currently has a VGM Score of A. The Zacks Consensus Estimate for the ongoing-year earnings has moved up to $8.32 from $6.02 in the past 60 days.
L.B. Foster Company (FSTR - Free Report) is engaged in the manufacture, fabrication and distribution of rail and trackwork, piling, highway products and tubular products. It also sells and rents steel sheet piling and H-bearing pile for foundation and earth retention requirements in the construction industry. For tubular markets, Foster supplies pipe and pipe coatings for pipelines and produces pipe-related products for special markets.This company has a VGM Score of A, at present. The Zacks Consensus Estimate of 92 cents for this year’s earnings has moved 8.2% north in 30 days’ time.
Select Medical Holdings Corporation (SEM - Free Report) is a healthcare company, which owns long-term acute care and inpatient rehabilitation hospitals as well as occupational health and physical therapy clinics. The stock currently sports a VGM Score of A. The Zacks Consensus Estimate for its 2021 earnings has been revised upward to $2.23 from $1.51 in the past 30 days.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or 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 that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.