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4 Stocks With Swelling Cash Flows to Add to Your Portfolio
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If achieving profit is a company’s goal, then having healthy cash flow is most essential to its existence, development and success. This is because cash offers strength, vitality and flexibility to make investment decisions as well as the fuel to run the growth engine.
In this regard, stocks like Pilgrim’s Pride Corporation (PPC - Free Report) , Encore Wire Corporation (WIRE - Free Report) , Grindrod Shipping Holdings Ltd. (GRIN - Free Report) and DLH Holdings Corp. (DLHC - Free Report) are worth buying.
Investors flock to companies that earn profits but even a profitable business can succumb to failure if its cash flow is irregular and eventually files for bankruptcy. But a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed. This is because cash not only shields a company from market mayhem but also indicates that profits are being channelized in the right direction.
In addition, with the pandemic giving rise to uncertainties in the global economy, market disruptions and dislocations, and liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance.
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 our four picks out of the 10 stocks that qualified the screening:
Pilgrim’s Pride is engaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products.
The Zacks Consensus Estimate for Pilgrim’s Pride’s 2022 earnings has been revised 3.9% upward to $2.65 from $2.55 in the past month. Pilgrim’s Pride currently has a VGM Score of A.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of both residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings.
The Zacks Consensus Estimate for Encore Wire’s 2022 earnings has been revised upward to $10.74 from $9.76 in a week’s time. Encore Wire has a VGM Score of A.
Grindrod Shipping is engaged in the ownership and operation of a diversified fleet of owned and long- and short-term chartered-in dry bulk vessels. GRIN is based in Singapore.
The consensus estimate for Grindrod’s ongoing-year earnings has moved 13% north to $5.56 in a week’s time. GRIN currently has a VGM Score of A.
DLH Holdings serves clients throughout the United States as a full-service provider of healthcare, logistics, and technical support services to the Department of Defense and Federal agencies.
The Zacks Consensus Estimate for DLH Holdings’ fiscal 2022 earnings has been revised 7.2% upward in the past month. DLHC 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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4 Stocks With Swelling Cash Flows to Add to Your Portfolio
If achieving profit is a company’s goal, then having healthy cash flow is most essential to its existence, development and success. This is because cash offers strength, vitality and flexibility to make investment decisions as well as the fuel to run the growth engine.
In this regard, stocks like Pilgrim’s Pride Corporation (PPC - Free Report) , Encore Wire Corporation (WIRE - Free Report) , Grindrod Shipping Holdings Ltd. (GRIN - Free Report) and DLH Holdings Corp. (DLHC - Free Report) are worth buying.
Investors flock to companies that earn profits but even a profitable business can succumb to failure if its cash flow is irregular and eventually files for bankruptcy. But a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed. This is because cash not only shields a company from market mayhem but also indicates that profits are being channelized in the right direction.
In addition, with the pandemic giving rise to uncertainties in the global economy, market disruptions and dislocations, and liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance.
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 our four picks out of the 10 stocks that qualified the screening:
Pilgrim’s Pride is engaged in the processing, production, marketing and distribution of frozen, fresh as well as value-added chicken products.
The Zacks Consensus Estimate for Pilgrim’s Pride’s 2022 earnings has been revised 3.9% upward to $2.65 from $2.55 in the past month. Pilgrim’s Pride currently has a VGM Score of A.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of both residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings.
The Zacks Consensus Estimate for Encore Wire’s 2022 earnings has been revised upward to $10.74 from $9.76 in a week’s time. Encore Wire has a VGM Score of A.
Grindrod Shipping is engaged in the ownership and operation of a diversified fleet of owned and long- and short-term chartered-in dry bulk vessels. GRIN is based in Singapore.
The consensus estimate for Grindrod’s ongoing-year earnings has moved 13% north to $5.56 in a week’s time. GRIN currently has a VGM Score of A.
DLH Holdings serves clients throughout the United States as a full-service provider of healthcare, logistics, and technical support services to the Department of Defense and Federal agencies.
The Zacks Consensus Estimate for DLH Holdings’ fiscal 2022 earnings has been revised 7.2% upward in the past month. DLHC 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.