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Find Strong Stocks to Buy with this First Profit Screener
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The market popped on Tuesday after a flat and slow day of trading to start the week. The tech-heavy Nasdaq drove the way, up 0.76% during regular hours, while the S&P 500 popped 0.39% and the Dow posted a more subdued gain.
Bullish investors have once again fought their way back in control—at least temporarily—following the market’s brief pullback early last week. Wall Street took a breather after it helped run stocks up to new highs as part of a month-long rally that began in early October when things reached oversold technical levels.
The market is now waiting on more concrete news or data to determine if the Fed will start lifting rates sooner and more quickly than previously projected after the U.S. saw 30-year high inflation last month.
Wall Street appears to remain rather optimistic despite rising prices, supply chain setbacks, and difficulty filling millions of open jobs. One possible reason for the positivity is that higher prices haven’t appeared yet in the S&P 500’s margins outlook for FY22 or FY23. Plus, the consumer-driven U.S. economy continues to prove resilient.
New data out Tuesday showed U.S. retail sales jumped a seasonally adjusted 1.7% in October vs. September. This topped expectations and it is possibly a sign of more good things to come in the vital holiday shopping period. In fact, J.P. Morgan announced it’s lifting its U.S. GDP forecast for Q4.
With all of this in mind, investors might want to remain on the hunt for strong stocks during the second half of the fourth quarter. Let’s utilize our Zacks‘First Profit’ screener to find solid candidates…
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 three of the over 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.
Image: Bigstock
Find Strong Stocks to Buy with this First Profit Screener
The market popped on Tuesday after a flat and slow day of trading to start the week. The tech-heavy Nasdaq drove the way, up 0.76% during regular hours, while the S&P 500 popped 0.39% and the Dow posted a more subdued gain.
Bullish investors have once again fought their way back in control—at least temporarily—following the market’s brief pullback early last week. Wall Street took a breather after it helped run stocks up to new highs as part of a month-long rally that began in early October when things reached oversold technical levels.
The market is now waiting on more concrete news or data to determine if the Fed will start lifting rates sooner and more quickly than previously projected after the U.S. saw 30-year high inflation last month.
Wall Street appears to remain rather optimistic despite rising prices, supply chain setbacks, and difficulty filling millions of open jobs. One possible reason for the positivity is that higher prices haven’t appeared yet in the S&P 500’s margins outlook for FY22 or FY23. Plus, the consumer-driven U.S. economy continues to prove resilient.
New data out Tuesday showed U.S. retail sales jumped a seasonally adjusted 1.7% in October vs. September. This topped expectations and it is possibly a sign of more good things to come in the vital holiday shopping period. In fact, J.P. Morgan announced it’s lifting its U.S. GDP forecast for Q4.
With all of this in mind, investors might want to remain on the hunt for strong stocks during the second half of the fourth quarter. Let’s utilize our Zacks‘First Profit’ screener to find solid candidates…
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 three of the over 50 stocks that made it through this week's screen…
Peabody Energy Corporation (BTU - Free Report)
MGM Resorts International (MGM - Free Report)
Expedia Group (EXPE - 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/.