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4 Stocks Worth Buying Now on Solid Cash-Flow Growth
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Picking profit-making stocks for investments might be popular but not flawless. This is because even a profit-making company can have a deficiency of cash flow and become bankrupt while meeting its obligations. However, one can effectively judge a company’s resilience by looking at its efficiency in generating cash flows.
Cash, which is indeed the lifeblood of any business, gives a company the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. Moreover, cash shields a company from market turmoil and indicates that profits are being channelized in the right direction.
Moreover, with uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance in the current context.
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 four out of 10 stocks that qualified the screening:
Griffon Corp., a diversified management and holding company, operates through wholly owned subsidiaries. It provides consumer and professional, as well as home and building products.
The Zacks Consensus Estimate for Griffon Corp.’s fiscal 2024 earnings per share has been revised 4.2% upward to $5.00 in the past month. GFF has a VGM Score of A.
Adtalem Global Education, based in Chicago, IL, is a leading healthcare education provider and workforce solutions innovator. The institutions of the company offer a wide array of programs across medical and healthcare services.
The Zacks Consensus Estimate for Adtalem Global’s fiscal 2024 sales and EPS suggests growth of 8.3% and 16.4%, respectively, from the year-ago period. ATGE has a VGM Score of A.
GeoPark Limited, based in Colombia, is an oil and gas explorer and producer. It has operations across Latin America.
The Zacks Consensus Estimate for GeoPark’s 2024 earnings per share has been revised 2.2% north and indicates 50.9% year-over-year growth. GPRK has a VGM Score of A.
Virco Manufacturing designs, produces and distributes quality furniture for the contract and education markets worldwide.
The Zacks Consensus Estimate for Virco Manufacturing’s fiscal 2025 earnings has been revised upward 16.3% to $1.86 per share over the past month. VIRC 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 Stocks Worth Buying Now on Solid Cash-Flow Growth
Picking profit-making stocks for investments might be popular but not flawless. This is because even a profit-making company can have a deficiency of cash flow and become bankrupt while meeting its obligations. However, one can effectively judge a company’s resilience by looking at its efficiency in generating cash flows.
In this regard, stocks like Griffon Corporation (GFF - Free Report) , Adtalem Global Education Inc. (ATGE - Free Report) , GeoPark Limited (GPRK - Free Report) and Virco Mfg. Corporation (VIRC - Free Report) are worth buying.
Cash, which is indeed the lifeblood of any business, gives a company the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. Moreover, cash shields a company from market turmoil and indicates that profits are being channelized in the right direction.
Moreover, with uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance in the current context.
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 four out of 10 stocks that qualified the screening:
Griffon Corp., a diversified management and holding company, operates through wholly owned subsidiaries. It provides consumer and professional, as well as home and building products.
The Zacks Consensus Estimate for Griffon Corp.’s fiscal 2024 earnings per share has been revised 4.2% upward to $5.00 in the past month. GFF has a VGM Score of A.
Adtalem Global Education, based in Chicago, IL, is a leading healthcare education provider and workforce solutions innovator. The institutions of the company offer a wide array of programs across medical and healthcare services.
The Zacks Consensus Estimate for Adtalem Global’s fiscal 2024 sales and EPS suggests growth of 8.3% and 16.4%, respectively, from the year-ago period. ATGE has a VGM Score of A.
GeoPark Limited, based in Colombia, is an oil and gas explorer and producer. It has operations across Latin America.
The Zacks Consensus Estimate for GeoPark’s 2024 earnings per share has been revised 2.2% north and indicates 50.9% year-over-year growth. GPRK has a VGM Score of A.
Virco Manufacturing designs, produces and distributes quality furniture for the contract and education markets worldwide.
The Zacks Consensus Estimate for Virco Manufacturing’s fiscal 2025 earnings has been revised upward 16.3% to $1.86 per share over the past month. VIRC 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.