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4 High-Flying Stocks With Rising Cash Flows to Buy Now
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As the Federal Reserve gears up to cut interest rates ahead, investors might be tempted to park their hard-earned money in stocks based on profit numbers. However, if achieving profit is a company’s goal, then having a healthy cash flow is the most essential for its existence, development and success. This is because cash offers a company the flexibility to make decisions, the means to make investments, the fuel to run its growth engine and can, indeed, be called the lifeblood of any business.
Often, investors flock to companies with solid top-line growth and increasing profit numbers. However, even a profit-making company can have a scarcity of cash flow and face bankruptcy while meeting its obligations. Therefore, to invest in the right stocks, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows because cash not only guards it from market mayhem but also suggests that profits are being channeled in the right direction. In fact, cash indicates a company’s true financial health.
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 seven stocks that qualified the screening:
Willdan Group is a provider of professional technical and consulting services to utilities, private industry and public agencies at all levels of government. WLDN enables its clients to realize cost and energy savings by providing a wide range of specialized services.
The Zacks Consensus Estimate for its current-year earnings has improved 5.9% over the past month to $1.97. WLDN has a VGM Score of A.
Euroseas was formed under the laws of the Republic of the Marshall Islands to consolidate the ship-owning interests of the Pittas family of Athens, Greece, which has been in the shipping business for the last 136 years. It operates in the dry cargo, dry bulk and container shipping markets.
The Zacks Consensus Estimate for Euroseas’ current-year earnings has moved 36.5% north in the past month. ESEA currently has a VGM Score of A.
Lifeway Foods produces Kefir, a drinkable product similar to, but distinct from, yogurt. LWAY currently has a VGM Score of A.
The Zacks Consensus Estimate for Lifeway's current-year earnings has moved up 23.8% over the past month.
RCM Technologies, based in Pennsauken, NJ, is a national provider of business, technology and resource solutions in information technology and professional engineering to customers in corporate and government sectors.
The Zacks Consensus Estimate for RCM Technologies’ 2024 earnings has been revised 2.2% upward to $2.33 in the past month. RCMT 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 High-Flying Stocks With Rising Cash Flows to Buy Now
As the Federal Reserve gears up to cut interest rates ahead, investors might be tempted to park their hard-earned money in stocks based on profit numbers. However, if achieving profit is a company’s goal, then having a healthy cash flow is the most essential for its existence, development and success. This is because cash offers a company the flexibility to make decisions, the means to make investments, the fuel to run its growth engine and can, indeed, be called the lifeblood of any business.
Often, investors flock to companies with solid top-line growth and increasing profit numbers. However, even a profit-making company can have a scarcity of cash flow and face bankruptcy while meeting its obligations. Therefore, to invest in the right stocks, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows because cash not only guards it from market mayhem but also suggests that profits are being channeled in the right direction. In fact, cash indicates a company’s true financial health.
In this regard, stocks like Willdan Group, Inc. (WLDN - Free Report) , Euroseas Ltd. (ESEA - Free Report) , Lifeway Foods, Inc. (LWAY - Free Report) and RCM Technologies, Inc. (RCMT - Free Report) are worth buying.
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 seven stocks that qualified the screening:
Willdan Group is a provider of professional technical and consulting services to utilities, private industry and public agencies at all levels of government. WLDN enables its clients to realize cost and energy savings by providing a wide range of specialized services.
The Zacks Consensus Estimate for its current-year earnings has improved 5.9% over the past month to $1.97. WLDN has a VGM Score of A.
Euroseas was formed under the laws of the Republic of the Marshall Islands to consolidate the ship-owning interests of the Pittas family of Athens, Greece, which has been in the shipping business for the last 136 years. It operates in the dry cargo, dry bulk and container shipping markets.
The Zacks Consensus Estimate for Euroseas’ current-year earnings has moved 36.5% north in the past month. ESEA currently has a VGM Score of A.
Lifeway Foods produces Kefir, a drinkable product similar to, but distinct from, yogurt. LWAY currently has a VGM Score of A.
The Zacks Consensus Estimate for Lifeway's current-year earnings has moved up 23.8% over the past month.
RCM Technologies, based in Pennsauken, NJ, is a national provider of business, technology and resource solutions in information technology and professional engineering to customers in corporate and government sectors.
The Zacks Consensus Estimate for RCM Technologies’ 2024 earnings has been revised 2.2% upward to $2.33 in the past month. RCMT 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.