We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks.com featured highlights include Unum Group, ArcBest, Vishay Intertechnology and Patrick Industries
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 23, 2022 – Stocks in this week’s article are Unum Group (UNM - Free Report) , ArcBest Corp. (ARCB - Free Report) , Vishay Intertechnology, Inc. (VSH - Free Report) and Patrick Industries, Inc. (PATK - Free Report) .
These 4 Low Price-to-Cash Flow Stocks Have Winning Potential
Inflationary pressure and the Federal Reserve’s hawkish stance call for a prudent investment strategy. So, as investors rebalance their portfolios, market pundits are placing their bets on value stocks.
Value style is considered one of the best practices when it comes to picking stocks. Value investing is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon.
There are different valuation metrics to determine a stock’s inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company’s financial position. For this, we would suggest the Price to Cash Flow (or P/CF) ratio as one of the key metrics. Unum Group, ArcBest Corp., Vishay Intertechnology, Inc. and Patrick Industries, Inc. boast a low P/CF ratio.
This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. One of the important factors that make P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same.
Positive cash flow indicates an increase in a company’s liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, solely based on the P/CF metric, an investment decision may not fetch the desired results. To identify stocks trading at a discount, you should expand your search criteria and consider price-to-book ratio, price-to-earnings ratio, and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the 17 stocks that qualified the screening:
Unum Group, which provides financial protection benefit solutions, carries a Zacks Rank #1 and has an expected EPS growth rate of 12.5% for three-five years. The company has a trailing four-quarter earnings surprise of 30.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Unum Group’s current financial year sales and EPS suggests growth of 1% and 36.6%, respectively, from the year-ago period. Unum Group has a Value Score of A. Shares of UNM have gained 52.6% in the past year.
ArcBest Corp., which provides freight transportation and integrated logistics services, carries a Zacks Rank #2. It has an expected EPS growth rate of 26.5% for three-five years. The company has a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for ArcBest Corporation's current financial-year sales and EPS suggests growth of 36.7% and 68.5%, respectively, from the year-ago period. ARCB has a Value Score of A. The stock has jumped 35.5% in the past year.
Vishay Intertechnology, which manufactures and supplies discrete semiconductors and passive electronic components, carries a Zacks Rank #2 and has an expected EPS growth rate of 22.7% for three-five years. The company has a trailing four-quarter earnings surprise of 10.7%, on average.
The Zacks Consensus Estimate for VSH’s current financial year sales and EPS suggests growth of 7.4% and 27.6%, respectively, from the year-ago period. Vishay Intertechnology has a Value Score of A. Shares of VSH have declined 2.7% in the past year.
Patrick Industries, a leading component solutions provider for the RV, marine, manufactured housing and various industrial markets, carries a Zacks Rank #2 and has an expected EPS growth rate of 8.5% for three-five years. Patrick Industries has a trailing four-quarter earnings surprise of 38.9%, on average.
The Zacks Consensus Estimate for Patrick Industries’ current financial year sales and EPS suggests growth of 24.5% and 36.6%, respectively, from the year-ago period. Patrick Industries has a Value Score of A. Shares of PATK have fallen 26.3% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Zacks.com featured highlights include Unum Group, ArcBest, Vishay Intertechnology and Patrick Industries
For Immediate Release
Chicago, IL – August 23, 2022 – Stocks in this week’s article are Unum Group (UNM - Free Report) , ArcBest Corp. (ARCB - Free Report) , Vishay Intertechnology, Inc. (VSH - Free Report) and Patrick Industries, Inc. (PATK - Free Report) .
These 4 Low Price-to-Cash Flow Stocks Have Winning Potential
Inflationary pressure and the Federal Reserve’s hawkish stance call for a prudent investment strategy. So, as investors rebalance their portfolios, market pundits are placing their bets on value stocks.
Value style is considered one of the best practices when it comes to picking stocks. Value investing is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon.
There are different valuation metrics to determine a stock’s inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company’s financial position. For this, we would suggest the Price to Cash Flow (or P/CF) ratio as one of the key metrics. Unum Group, ArcBest Corp., Vishay Intertechnology, Inc. and Patrick Industries, Inc. boast a low P/CF ratio.
This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. One of the important factors that make P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same.
Positive cash flow indicates an increase in a company’s liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, solely based on the P/CF metric, an investment decision may not fetch the desired results. To identify stocks trading at a discount, you should expand your search criteria and consider price-to-book ratio, price-to-earnings ratio, and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the 17 stocks that qualified the screening:
Unum Group, which provides financial protection benefit solutions, carries a Zacks Rank #1 and has an expected EPS growth rate of 12.5% for three-five years. The company has a trailing four-quarter earnings surprise of 30.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Unum Group’s current financial year sales and EPS suggests growth of 1% and 36.6%, respectively, from the year-ago period. Unum Group has a Value Score of A. Shares of UNM have gained 52.6% in the past year.
ArcBest Corp., which provides freight transportation and integrated logistics services, carries a Zacks Rank #2. It has an expected EPS growth rate of 26.5% for three-five years. The company has a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for ArcBest Corporation's current financial-year sales and EPS suggests growth of 36.7% and 68.5%, respectively, from the year-ago period. ARCB has a Value Score of A. The stock has jumped 35.5% in the past year.
Vishay Intertechnology, which manufactures and supplies discrete semiconductors and passive electronic components, carries a Zacks Rank #2 and has an expected EPS growth rate of 22.7% for three-five years. The company has a trailing four-quarter earnings surprise of 10.7%, on average.
The Zacks Consensus Estimate for VSH’s current financial year sales and EPS suggests growth of 7.4% and 27.6%, respectively, from the year-ago period. Vishay Intertechnology has a Value Score of A. Shares of VSH have declined 2.7% in the past year.
Patrick Industries, a leading component solutions provider for the RV, marine, manufactured housing and various industrial markets, carries a Zacks Rank #2 and has an expected EPS growth rate of 8.5% for three-five years. Patrick Industries has a trailing four-quarter earnings surprise of 38.9%, on average.
The Zacks Consensus Estimate for Patrick Industries’ current financial year sales and EPS suggests growth of 24.5% and 36.6%, respectively, from the year-ago period. Patrick Industries has a Value Score of A. Shares of PATK have fallen 26.3% in the past year.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1970599/these-4-low-price-to-cash-flow-stocks-have-winning-potential
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.