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4 Stocks With Swelling Cash Flows to Enhance Your Portfolio
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Cash is the lifeblood of a company’s existence, development and success. It gives a company strength and vitality, the flexibility to make decisions, the means to make investments, and the fuel to run its growth engine. Thus, cash indicates a company’s true financial health.
Investors flock to companies that earn profits. However, even a profitable business can succumb to failure if its cash flow is uneven and eventually file for bankruptcy. Therefore, one can effectively judge a company’s resilience by evaluating its power to generate cash flow. This is because cash not only guards a company against market mayhem but also indicates that profits are being channelized in the right direction.
Amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns, analyzing a company’s cash-generating efficiency has indeed become all the more relevant.
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 18 stocks that qualified the screening:
InterDigital is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company is engaged in designing and developing a wide range of advanced technology solutions, which are used in digital cellular, and wireless 3G, 4G and IEEE 802-related products and networks.
The Zacks Consensus Estimate for the company’s 2023 earnings per share has significantly improved to $6.04 from $2.77 over the past month. IDCC has a VGM Score of A.
M/I Homes is one of the nation's leading builders of single-family homes. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, move-up, empty-nester and luxury buyers.
The Zacks Consensus Estimate for M/I Homes’ current-year earnings has moved up 11.5% over the past two months to $12.40 per share. MHO has a VGM Score of B.
Tecnoglass is a leading manufacturer of architectural glass, windows and associated aluminum products serving the global residential and commercial end markets.
The Zacks Consensus Estimate for Tecnoglass’ 2023 earnings has been revised 7.3% upward in the past month. TGLS has a VGM Score of A.
EZCORP is engaged in establishing, acquiring and operating pawnshops, which function as convenient sources of consumer credit and as value-oriented specialty retailers of primarily previously owned merchandise.
The Zacks Consensus Estimate for EZCORP’s fiscal 2023 earnings has been revised 13.3% upward to 85 cents per share in the past month. EZPW has a VGM Score of A.
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 Enhance Your Portfolio
Cash is the lifeblood of a company’s existence, development and success. It gives a company strength and vitality, the flexibility to make decisions, the means to make investments, and the fuel to run its growth engine. Thus, cash indicates a company’s true financial health.
In this regard, stocks like InterDigital, Inc. (IDCC - Free Report) , M/I Homes, Inc. (MHO - Free Report) , Tecnoglass Inc. (TGLS - Free Report) and EZCORP, Inc. (EZPW - Free Report) are worth buying.
Investors flock to companies that earn profits. However, even a profitable business can succumb to failure if its cash flow is uneven and eventually file for bankruptcy. Therefore, one can effectively judge a company’s resilience by evaluating its power to generate cash flow. This is because cash not only guards a company against market mayhem but also indicates that profits are being channelized in the right direction.
Amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns, analyzing a company’s cash-generating efficiency has indeed become all the more relevant.
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 18 stocks that qualified the screening:
InterDigital is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company is engaged in designing and developing a wide range of advanced technology solutions, which are used in digital cellular, and wireless 3G, 4G and IEEE 802-related products and networks.
The Zacks Consensus Estimate for the company’s 2023 earnings per share has significantly improved to $6.04 from $2.77 over the past month. IDCC has a VGM Score of A.
M/I Homes is one of the nation's leading builders of single-family homes. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, move-up, empty-nester and luxury buyers.
The Zacks Consensus Estimate for M/I Homes’ current-year earnings has moved up 11.5% over the past two months to $12.40 per share. MHO has a VGM Score of B.
Tecnoglass is a leading manufacturer of architectural glass, windows and associated aluminum products serving the global residential and commercial end markets.
The Zacks Consensus Estimate for Tecnoglass’ 2023 earnings has been revised 7.3% upward in the past month. TGLS has a VGM Score of A.
EZCORP is engaged in establishing, acquiring and operating pawnshops, which function as convenient sources of consumer credit and as value-oriented specialty retailers of primarily previously owned merchandise.
The Zacks Consensus Estimate for EZCORP’s fiscal 2023 earnings has been revised 13.3% upward to 85 cents per share in the past month. EZPW has a VGM Score of A.
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.