We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Forget Profit, Bet on 4 Stocks With Increasing Cash Flows
Read MoreHide Full Article
Investors generally prefer businesses that earn profits. Even a profit-making company can end up bankrupt while meeting its obligations if it has a dearth of cash flow. Therefore, rather than brooding too much on profit numbers, effectively judging a company’s resiliency by assessing its efficacy in generating cash flows can be far more rewarding.
In this regard, stocks like Publicis Groupe S.A. (PUBGY - Free Report) , Jabil Inc. (JBL - Free Report) , Encore Wire Corporation and Hudson Technologies, Inc. (HDSN - Free Report) are worth buying.
This is because, cash is the key to a company’s existence, development and success. It offers the flexibility to make decisions, the means to make investments and the fuel to run its growth engine, thereby indicating a company’s true financial health. In fact, cash not only shields a company from market mayhem but also indicates that its profits are being channelized in the right direction.
Moreover, analyzing a company’s cash-generating efficiency has indeed become more relevant in the current context amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions or the pandemic.
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, it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in the 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 industry categories.
Here are our four picks out of the 15 stocks that qualified the screening:
Publicis Groupe S.A. is a global advertising and communications organization, offering a range of services to companies in 100 countries, with particular strength in France, Germany, the United Kingdom, Spain, Italy and North America.
The Zacks Consensus Estimate for Publicis Groupe’s earnings for the current year has moved 1.9% north in the past week. PUBGY currently has a VGM Score of A.
Jabil, headquartered in St. Petersburg, FL, Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
The Zacks Consensus Estimate for Jabil’s earnings for the fiscal year ending August 2023 has moved 3.8% north in the past two months. JBL currently has a VGM Score of A.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings.
The Zacks Consensus Estimate for Encore Wire’s 2022 earnings has been revised 24.2% upward to $33.35 from $26.86 in the past month. WIRE has a VGM Score of A.
Hudson Technologies, headquartered in Woodcliff Lake, NJ, is a refrigerant services company, providing solutions to recurring problems within the refrigeration industry, primarily in the United States.
The Zacks Consensus Estimate of $2.16 per share for Hudson Technologies’ current-year earnings has moved 20.7% north in the past month. HDSN has a VGM Score of A.
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.
Image: Bigstock
Forget Profit, Bet on 4 Stocks With Increasing Cash Flows
Investors generally prefer businesses that earn profits. Even a profit-making company can end up bankrupt while meeting its obligations if it has a dearth of cash flow. Therefore, rather than brooding too much on profit numbers, effectively judging a company’s resiliency by assessing its efficacy in generating cash flows can be far more rewarding.
In this regard, stocks like Publicis Groupe S.A. (PUBGY - Free Report) , Jabil Inc. (JBL - Free Report) , Encore Wire Corporation and Hudson Technologies, Inc. (HDSN - Free Report) are worth buying.
This is because, cash is the key to a company’s existence, development and success. It offers the flexibility to make decisions, the means to make investments and the fuel to run its growth engine, thereby indicating a company’s true financial health. In fact, cash not only shields a company from market mayhem but also indicates that its profits are being channelized in the right direction.
Moreover, analyzing a company’s cash-generating efficiency has indeed become more relevant in the current context amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions or the pandemic.
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, it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in the 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 industry categories.
Here are our four picks out of the 15 stocks that qualified the screening:
Publicis Groupe S.A. is a global advertising and communications organization, offering a range of services to companies in 100 countries, with particular strength in France, Germany, the United Kingdom, Spain, Italy and North America.
The Zacks Consensus Estimate for Publicis Groupe’s earnings for the current year has moved 1.9% north in the past week. PUBGY currently has a VGM Score of A.
Jabil, headquartered in St. Petersburg, FL, Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, product management and after-market services to customers catering to aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries.
The Zacks Consensus Estimate for Jabil’s earnings for the fiscal year ending August 2023 has moved 3.8% north in the past two months. JBL currently has a VGM Score of A.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings.
The Zacks Consensus Estimate for Encore Wire’s 2022 earnings has been revised 24.2% upward to $33.35 from $26.86 in the past month. WIRE has a VGM Score of A.
Hudson Technologies, headquartered in Woodcliff Lake, NJ, is a refrigerant services company, providing solutions to recurring problems within the refrigeration industry, primarily in the United States.
The Zacks Consensus Estimate of $2.16 per share for Hudson Technologies’ current-year earnings has moved 20.7% north in the past month. HDSN has a VGM Score of A.
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.