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Find Strong Stocks with this First Profit Screener
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The market began June trading essentially flat on another low volume day following the long Memorial Day weekend. Trading volume will likely remain far below average as summer begins and people start vacationing again, as the coronavirus vaccine push encourages even more people to return to their normal lives, especially as cities around the U.S. reopen.
The S&P 500 and the Nasdaq both slipped marginally Tuesday, while the Dow closed up +0.13%. Despite the subdued start to the month, let’s not forget that the bulls stepped in to help Wall Street seemingly shrug off inflation worries, with the Nasdaq back above its 50-day moving average and the S&P 500 once again within touching distance of its records.
The positivity flows from the vaccine-boosted economic comeback, the continually improving earnings picture, and much more. Clearly, rising prices and supply chain constraints need to be monitored. And Wall Street will be watching the Fed closely (also read: Previewing Q2 Earnings Season).
Even if rates rise, yields could remain historically low. This likely prolongs the there is no alternative investing we have seen for a long time. For instance, the 10-year U.S. Treasury yield has moved slightly above 3% only a few times in the last decade, after remaining well above the threshold in the pre-financial crisis world.
Given the broader reopening backdrop and the constantly improving earnings outlook, investors might want to consider adding to their portfolios as we head into summer. All that said, our ‘First Profit’ screener is a solid place to start searching for strong stocks…
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the roughly 50 stocks that made it through this week's screen…
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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.
Now would you like to screen for the latest stocks from Zacks' most successful strategies? From 2016 through 2020, while the market gained 103.9%, we saw results like these: Filtered Zacks Rank5 +424.1%, New Highs +429.0%, Technical Analysis and Fundamental Analysis +477.8%, andValue Method 1 +580.0%.
You're invited to screen the latest stocks in seconds by trying Zacks' Research Wizard stock-picking program. Or use the Wizard to create your own market-beating strategies. No credit card needed, no cost or obligation.
Image: Bigstock
Find Strong Stocks with this First Profit Screener
The market began June trading essentially flat on another low volume day following the long Memorial Day weekend. Trading volume will likely remain far below average as summer begins and people start vacationing again, as the coronavirus vaccine push encourages even more people to return to their normal lives, especially as cities around the U.S. reopen.
The S&P 500 and the Nasdaq both slipped marginally Tuesday, while the Dow closed up +0.13%. Despite the subdued start to the month, let’s not forget that the bulls stepped in to help Wall Street seemingly shrug off inflation worries, with the Nasdaq back above its 50-day moving average and the S&P 500 once again within touching distance of its records.
The positivity flows from the vaccine-boosted economic comeback, the continually improving earnings picture, and much more. Clearly, rising prices and supply chain constraints need to be monitored. And Wall Street will be watching the Fed closely (also read: Previewing Q2 Earnings Season).
Even if rates rise, yields could remain historically low. This likely prolongs the there is no alternative investing we have seen for a long time. For instance, the 10-year U.S. Treasury yield has moved slightly above 3% only a few times in the last decade, after remaining well above the threshold in the pre-financial crisis world.
Given the broader reopening backdrop and the constantly improving earnings outlook, investors might want to consider adding to their portfolios as we head into summer. All that said, our ‘First Profit’ screener is a solid place to start searching for strong stocks…
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the roughly 50 stocks that made it through this week's screen…
Chewy Inc. (CHWY - Free Report)
Moderna, Inc. (MRNA - Free Report)
United States Steel Corporation (X - Free Report)
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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/.
Today's Stocks from Zacks' Best Screens
Now would you like to screen for the latest stocks from Zacks' most successful strategies? From 2016 through 2020, while the market gained 103.9%, we saw results like these: Filtered Zacks Rank5 +424.1%, New Highs +429.0%, Technical Analysis and Fundamental Analysis +477.8%, andValue Method 1 +580.0%.
You're invited to screen the latest stocks in seconds by trying Zacks' Research Wizard stock-picking program. Or use the Wizard to create your own market-beating strategies. No credit card needed, no cost or obligation.
Try it for 2 weeks free >>