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4 Stocks with Rising Cash Flows to Improve Your Portfolio
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Laying a wager on stocks based on profit numbers and surprises appear a good option in the ongoing reporting cycle. But looking beyond profits and figuring out a company’s efficiency in generating cash flows can be far more rewarding. This is because cash is the most indispensable factor for any company. It gives strength and vitality to a company and is the key for its existence, development and success.
In fact, even a profit making company can have a shortage of cash flows and face trouble in meeting its obligations if its profits are not channelized to the right direction to fund future growth. But a company with adequate cash flows can effectively tide over any market mayhem besides enjoying flexibility in decision making and chasing potential investments.
To find this efficiency in generating cash flows, one needs to consider a company’s net cash flow. In any business, cash moves in and out, net cash flow explains how much money the company is actually making. Experiencing a positive cash flow denotes an increase in the company’s liquid assets. This provides the means to meet debt obligations, shell out for expenses, reinvest in business, endure downturns and finally return wealth to shareholders. On the other hand, incurring negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, positive cash flow alone is not sufficient to predict a company’s future growth. Consistent growth can only be achieved by a company when this positive cash flow is increasing because this improvement indicates management’s efficiency in regulating its cash movements and lesser dependency on external financing sources for running its business.
As a result, while picking stocks in this earnings season and beyond, keep yourself abreast with the following screen to bet on those with dependable and increasing 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 individual industry categories.
Here are four out of the six stocks that qualified the screening:
M/I Homes, Inc. (MHO - Free Report) , based in Columbus, OH, is one of the nation's leading builders of single-family homes. Their homes are marketed and sold mainly under the trade names M/I Homes and Showcase Homes. The company has a VGM Score of A.
The Zacks Consensus Estimate for 2017 earnings increased 17.3% over the past seven days to $3.05. Moreover, M/I Homes logged in a return of 41.3% over the past one year, which is way better than the 22.4% gain witnessed by the Zacks categorized Building Products - Home Builders industry.
SP Plus Corporation (SP - Free Report) , based in Chicago, provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry. The company has a VGM score of A. Moreover, it has an expected long-term growth rate of 11.5%.
Also, SP Plus logged a return of 56.5% over the past one year, which is way better than the 9.3% gain experienced by the Zacks categorized Consumer Services - Miscellaneous industry.
BGC Partners, Inc. , headquartered in London and New York, is a reputed global brokerage company servicing the financial and real estate markets. The company has a VGM Score of B.
The Zacks Consensus Estimate for 2017 earnings increased 5.3% over the past 30 days to $1.00. Moreover, over the past six months, BGC Partners shares outperformed the Zacks categorized Financial - Investment Bank industry, registering a return of 35.8% against the industry’s increase of 22.3%.
PCTEL, Inc. , headquartered in Bloomingdale, IL, designs, develops and delivers wireless solutions. Specifically, the company delivers Performance Critical TELecom technology solutions to the wireless industry and is a leading supplier of antennas and wireless network testing solutions. The company has a VGM Score of B.
The Zacks Consensus Estimate for earnings in 2017 is 10 cents, reflecting an expected growth of 150% from a year-ago. Also, over the past one year, PCTEL shares outperformed the Zacks categorized Wireless Equipment industry, registering a return of 77.7% against the industry’s increase of 5.5%.
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 backtesting 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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
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4 Stocks with Rising Cash Flows to Improve Your Portfolio
Laying a wager on stocks based on profit numbers and surprises appear a good option in the ongoing reporting cycle. But looking beyond profits and figuring out a company’s efficiency in generating cash flows can be far more rewarding. This is because cash is the most indispensable factor for any company. It gives strength and vitality to a company and is the key for its existence, development and success.
In fact, even a profit making company can have a shortage of cash flows and face trouble in meeting its obligations if its profits are not channelized to the right direction to fund future growth. But a company with adequate cash flows can effectively tide over any market mayhem besides enjoying flexibility in decision making and chasing potential investments.
To find this efficiency in generating cash flows, one needs to consider a company’s net cash flow. In any business, cash moves in and out, net cash flow explains how much money the company is actually making. Experiencing a positive cash flow denotes an increase in the company’s liquid assets. This provides the means to meet debt obligations, shell out for expenses, reinvest in business, endure downturns and finally return wealth to shareholders. On the other hand, incurring negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, positive cash flow alone is not sufficient to predict a company’s future growth. Consistent growth can only be achieved by a company when this positive cash flow is increasing because this improvement indicates management’s efficiency in regulating its cash movements and lesser dependency on external financing sources for running its business.
As a result, while picking stocks in this earnings season and beyond, keep yourself abreast with the following screen to bet on those with dependable and increasing 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 individual industry categories.
Here are four out of the six stocks that qualified the screening:
M/I Homes, Inc. (MHO - Free Report) , based in Columbus, OH, is one of the nation's leading builders of single-family homes. Their homes are marketed and sold mainly under the trade names M/I Homes and Showcase Homes. The company has a VGM Score of A.
The Zacks Consensus Estimate for 2017 earnings increased 17.3% over the past seven days to $3.05. Moreover, M/I Homes logged in a return of 41.3% over the past one year, which is way better than the 22.4% gain witnessed by the Zacks categorized Building Products - Home Builders industry.
SP Plus Corporation (SP - Free Report) , based in Chicago, provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry. The company has a VGM score of A. Moreover, it has an expected long-term growth rate of 11.5%.
Also, SP Plus logged a return of 56.5% over the past one year, which is way better than the 9.3% gain experienced by the Zacks categorized Consumer Services - Miscellaneous industry.
BGC Partners, Inc. , headquartered in London and New York, is a reputed global brokerage company servicing the financial and real estate markets. The company has a VGM Score of B.
The Zacks Consensus Estimate for 2017 earnings increased 5.3% over the past 30 days to $1.00. Moreover, over the past six months, BGC Partners shares outperformed the Zacks categorized Financial - Investment Bank industry, registering a return of 35.8% against the industry’s increase of 22.3%.
PCTEL, Inc. , headquartered in Bloomingdale, IL, designs, develops and delivers wireless solutions. Specifically, the company delivers Performance Critical TELecom technology solutions to the wireless industry and is a leading supplier of antennas and wireless network testing solutions. The company has a VGM Score of B.
The Zacks Consensus Estimate for earnings in 2017 is 10 cents, reflecting an expected growth of 150% from a year-ago. Also, over the past one year, PCTEL shares outperformed the Zacks categorized Wireless Equipment industry, registering a return of 77.7% against the industry’s increase of 5.5%.
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 backtesting 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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »