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4 Top-Rated Stocks to Pick With Impressive Cash Flow Growth
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If achieving profit is a company’s goal then having a healthy cash flow is the most essential to its existence, development and success. This is because cash offers the flexibility to make decisions, the means to make investments and the fuel to run its growth engine. Thus, it can safely be called the lifeblood of any business.
Even a company generating profits may face bankruptcy while meeting obligations if it is low on cash flow. However, a company with a sturdy cash balance can effectively tide over any market mayhem. Therefore, one must go beyond profit numbers for prudent investment and look at a company’s efficiency in generating cash flows. Analyzing a company’s cash-generating efficiency has become more relevant amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns.
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 13 stocks that qualified the screening:
Copa Holdings is based in Panama City, Panama. The company, through its main subsidiaries — Copa Airlines and Copa Colombia — offers airline passenger and cargo services. Through its operating subsidiaries, CPA offers services to countries in North, Central and South America, and the Caribbean.
The Zacks Consensus Estimate for Copa Holdings’ current-year earnings has moved up 17.6% to $14.82 per share in the past month. Currently, CPA has a VGM Score of A.
EnerSys engages in manufacturing, marketing and distribution of various industrial batteries. Additionally, the company develops battery chargers and accessories, power equipment, and outdoor cabinet enclosures. Apart from this, it provides support services for clients.
The Zacks Consensus Estimate for EnerSys’ fiscal 2024 earnings of $6.84 per share has moved 11.6% north in the past month. ENS has a VGM Score of A.
M/I Homes is one of the leading builders of single-family homes in the United States. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, move-up, empty-nester and luxury buyers.
The Zacks Consensus Estimate for M/I Homes’ current-year earnings has moved up 11.5% over the past two months to $12.40 per share. MHO has a VGM Score of A.
EZCORP is engaged in establishing, acquiring and operating pawnshops, which function as convenient sources of consumer credit and as value-oriented specialty retailers of primarily previously owned merchandise.
The Zacks Consensus Estimate for EZCORP’s fiscal 2023 earnings has been revised 13.3% upward to 85 cents per share in the past two months. EZPW 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.
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4 Top-Rated Stocks to Pick With Impressive Cash Flow Growth
If achieving profit is a company’s goal then having a healthy cash flow is the most essential to its existence, development and success. This is because cash offers the flexibility to make decisions, the means to make investments and the fuel to run its growth engine. Thus, it can safely be called the lifeblood of any business.
In this regard, stocks like Copa Holdings, S.A. (CPA - Free Report) , EnerSys ((ENS - Free Report) ), M/I Homes, Inc. (MHO - Free Report) and EZCORP, Inc. (EZPW - Free Report) are worth buying.
Even a company generating profits may face bankruptcy while meeting obligations if it is low on cash flow. However, a company with a sturdy cash balance can effectively tide over any market mayhem. Therefore, one must go beyond profit numbers for prudent investment and look at a company’s efficiency in generating cash flows. Analyzing a company’s cash-generating efficiency has become more relevant amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns.
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 13 stocks that qualified the screening:
Copa Holdings is based in Panama City, Panama. The company, through its main subsidiaries — Copa Airlines and Copa Colombia — offers airline passenger and cargo services. Through its operating subsidiaries, CPA offers services to countries in North, Central and South America, and the Caribbean.
The Zacks Consensus Estimate for Copa Holdings’ current-year earnings has moved up 17.6% to $14.82 per share in the past month. Currently, CPA has a VGM Score of A.
EnerSys engages in manufacturing, marketing and distribution of various industrial batteries. Additionally, the company develops battery chargers and accessories, power equipment, and outdoor cabinet enclosures. Apart from this, it provides support services for clients.
The Zacks Consensus Estimate for EnerSys’ fiscal 2024 earnings of $6.84 per share has moved 11.6% north in the past month. ENS has a VGM Score of A.
M/I Homes is one of the leading builders of single-family homes in the United States. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, move-up, empty-nester and luxury buyers.
The Zacks Consensus Estimate for M/I Homes’ current-year earnings has moved up 11.5% over the past two months to $12.40 per share. MHO has a VGM Score of A.
EZCORP is engaged in establishing, acquiring and operating pawnshops, which function as convenient sources of consumer credit and as value-oriented specialty retailers of primarily previously owned merchandise.
The Zacks Consensus Estimate for EZCORP’s fiscal 2023 earnings has been revised 13.3% upward to 85 cents per share in the past two months. EZPW 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.