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Investors Can Find Big Returns with this First Profit Screen
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Today, amid broader market uncertainty, we are taking a look at our ‘First Profit’ stock screen. The idea is to search for companies that just reported their first quarterly profit within the last year. 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.
It is helpful to run this screen both during and after earnings season. Clearly, second-quarter earnings season is behind us, even though corporate earnings never really sleep. Nonetheless, Wall Street and investors likely have third-quarter earnings in their sights.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners, especially during our current environment.
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’re 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 5 of the 20-plus 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.
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 2017 through 2018, while the market gained +15.8%, we saw results like these: Big Money Zacks +38.0%, Small-Cap Growth +61.3%, Technical Analysis & Fundamental Analysis +61.6%, New Highs +68.1%, and Filtered Zacks Rank 5 +98.3%.
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
Investors Can Find Big Returns with this First Profit Screen
Today, amid broader market uncertainty, we are taking a look at our ‘First Profit’ stock screen. The idea is to search for companies that just reported their first quarterly profit within the last year. 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.
It is helpful to run this screen both during and after earnings season. Clearly, second-quarter earnings season is behind us, even though corporate earnings never really sleep. Nonetheless, Wall Street and investors likely have third-quarter earnings in their sights.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners, especially during our current environment.
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’re 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 5 of the 20-plus stocks that made it through this week's screen…
Catalyst Pharmaceuticals, Inc. (CPRX - Free Report)
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report)
Coherus BioSciences, Inc. (CHRS - Free Report)
Diebold Nixdorf, Incorporated (DBD - Free Report)
LiqTech International, Inc. (LIQT - 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.
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 2017 through 2018, while the market gained +15.8%, we saw results like these: Big Money Zacks +38.0%, Small-Cap Growth +61.3%, Technical Analysis & Fundamental Analysis +61.6%, New Highs +68.1%, and Filtered Zacks Rank 5 +98.3%.
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 >>