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Buy These 4 Stocks With Rising Cash Flows for Big Gains
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In the final leg of the ongoing reporting cycle, it might seem appropriate to lay a wager on stocks based on profit numbers and earnings surprises. However, looking beyond profits and evaluating a company’s cash position can be far more rewarding. This is because even though profit is a company’s goal, cash is its lifeblood, a measure of resiliency and an indicator of true financial health.
Even a profit-making company can have a dearth of cash flow and face bankruptcy while meeting its obligations. Nonetheless, a healthy cash position indicates that profits are being efficiently channeled to the company’s reserves, which not only shield it from market mayhem but also offer flexibility to make decisions, chase potential investments and run its growth engine.
Analyzing a company’s cash-generating efficiency holds more relevance in the current context with 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 four out of nine stocks that qualified the screening:
Steelcase, headquartered in Grand Rapids, MI, is a designer and manufacturer of products used to create high-performance work environments. Its product portfolio includes furniture systems, seating, storage, desks, casegoods, interior architectural products, technology products and related products and services.
The Zacks Consensus Estimate for Steelcase’s fiscal 2025 earnings per share has been revised 8.7% upward to $1.00 in the past two months. SCS has a VGM Score of B.
Carriage Services, based in Houston, TX, is a leading provider of death care services and products in the United States. The company provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
The Zacks Consensus Estimate for CSV’s 2024 earnings per share has moved up 3.5% over the past week to $2.34. Carriage Services has a VGM Score of A.
biote Corp., headquartered in Irving, TX, is a solutions provider in preventive healthcare through the delivery of personalized hormone optimization and therapeutic wellness.
The Zacks Consensus Estimate for biote Corp.’s 2024 earnings has been revised 3.8% upward to 27 cents per share over the past two months. BTMD has a VGM Score of A.
Acme United Corporation, based in Shelton, CT, operates principally in two business segments. ACU’s operations in the medical segment involve the production and sale of metal disposable medical scissors and instruments, sterile procedure trays, germicidal products, dressings and wound care packs. Operations in the consumer segment involve the production and sale of shears, scissors, knives, rulers, first aid kits and chalkboard items for school, office and home use.
The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past month. ACU has a VGM Score of B.
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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Buy These 4 Stocks With Rising Cash Flows for Big Gains
In the final leg of the ongoing reporting cycle, it might seem appropriate to lay a wager on stocks based on profit numbers and earnings surprises. However, looking beyond profits and evaluating a company’s cash position can be far more rewarding. This is because even though profit is a company’s goal, cash is its lifeblood, a measure of resiliency and an indicator of true financial health.
In this regard, stocks like Steelcase Inc. (SCS - Free Report) , Carriage Services, Inc. (CSV - Free Report) , biote Corp. (BTMD - Free Report) and Acme United Corporation (ACU - Free Report) are worth buying.
Even a profit-making company can have a dearth of cash flow and face bankruptcy while meeting its obligations. Nonetheless, a healthy cash position indicates that profits are being efficiently channeled to the company’s reserves, which not only shield it from market mayhem but also offer flexibility to make decisions, chase potential investments and run its growth engine.
Analyzing a company’s cash-generating efficiency holds more relevance in the current context with 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 four out of nine stocks that qualified the screening:
Steelcase, headquartered in Grand Rapids, MI, is a designer and manufacturer of products used to create high-performance work environments. Its product portfolio includes furniture systems, seating, storage, desks, casegoods, interior architectural products, technology products and related products and services.
The Zacks Consensus Estimate for Steelcase’s fiscal 2025 earnings per share has been revised 8.7% upward to $1.00 in the past two months. SCS has a VGM Score of B.
Carriage Services, based in Houston, TX, is a leading provider of death care services and products in the United States. The company provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
The Zacks Consensus Estimate for CSV’s 2024 earnings per share has moved up 3.5% over the past week to $2.34. Carriage Services has a VGM Score of A.
biote Corp., headquartered in Irving, TX, is a solutions provider in preventive healthcare through the delivery of personalized hormone optimization and therapeutic wellness.
The Zacks Consensus Estimate for biote Corp.’s 2024 earnings has been revised 3.8% upward to 27 cents per share over the past two months. BTMD has a VGM Score of A.
Acme United Corporation, based in Shelton, CT, operates principally in two business segments. ACU’s operations in the medical segment involve the production and sale of metal disposable medical scissors and instruments, sterile procedure trays, germicidal products, dressings and wound care packs. Operations in the consumer segment involve the production and sale of shears, scissors, knives, rulers, first aid kits and chalkboard items for school, office and home use.
The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past month. ACU has a VGM Score of B.
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.