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Buy 4 Stocks With Increasing Cash Flows Ahead of Q1 Earnings
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Investors would find it easier to crunch profit numbers and evaluate surprises in the impending Q1 earnings season. However, an assessment of the company’s cash position which reveals its true financial health can be far more rewarding.
Even a profit-making company can have a dearth of cash flow and fail to meet its obligations. But a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed.
This is because, cash gives a company vitality and strength. It offers flexibility to make decisions, the means to make potential investments and the fuel to run the growth engine. It is the key for its existence, development and success and can indeed be referred to as the lifeblood of a company.
To find this efficiency, one needs to consider its net cash flow figure. While in any business cash moves in and out, it is net cash flow that explains how much money the company is actually generating.
If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it 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, 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, ahead of the Q1 earnings season, 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 individual industry categories.
Here are four out of five stocks that qualified the screening:
Verso Corporation , based in Miamisburg, OH, is engaged in the paper industry. The company produces coated freesheet, coated ground wood and uncoated super calendared papers and pulp. The company has a VGM Score of A.
Verso Corporation has an expected year-over-year earnings growth rate of 434.7%. The Zacks Consensus Estimate for 2018 earnings has remained unchanged over the past week.
Boulder, CO-based DMC Global Inc. (BOOM - Free Report) is a diversified technology company. Its operating sector consists of industrial infrastructure and oilfield products and services. The company has a VGM Score of A.
DMC Global has a projected long-term growth rate of 20%. Further, the stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for 2018 earnings moving 9.6% north in a month’s time.
QuinStreet, Inc. (QNST - Free Report) , based in Foster City, CA, is a provider of online direct marketing and media services. The company has a VGM Score of B.
QuinStreet has a projected long-term growth rate of 25%. The stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for fiscal 2018 earnings increasing 20% in two months’ time.
Uruguay-based Arcos Dorados Holdings Inc. (ARCO - Free Report) operates as a franchisee of McDonald's with its operations divided in Brazil; North Latin America division; South Latin America and the Caribbean division. The company has a VGM Score of B.
Arcos Dorados Holdings has a projected long-term growth rate of 19.4%. The stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for 2018 earnings moving 2.7% north in a month.
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.
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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Buy 4 Stocks With Increasing Cash Flows Ahead of Q1 Earnings
Investors would find it easier to crunch profit numbers and evaluate surprises in the impending Q1 earnings season. However, an assessment of the company’s cash position which reveals its true financial health can be far more rewarding.
Even a profit-making company can have a dearth of cash flow and fail to meet its obligations. But a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed.
This is because, cash gives a company vitality and strength. It offers flexibility to make decisions, the means to make potential investments and the fuel to run the growth engine. It is the key for its existence, development and success and can indeed be referred to as the lifeblood of a company.
To find this efficiency, one needs to consider its net cash flow figure. While in any business cash moves in and out, it is net cash flow that explains how much money the company is actually generating.
If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it 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, 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, ahead of the Q1 earnings season, 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 individual industry categories.
Here are four out of five stocks that qualified the screening:
Verso Corporation , based in Miamisburg, OH, is engaged in the paper industry. The company produces coated freesheet, coated ground wood and uncoated super calendared papers and pulp. The company has a VGM Score of A.
Verso Corporation has an expected year-over-year earnings growth rate of 434.7%. The Zacks Consensus Estimate for 2018 earnings has remained unchanged over the past week.
Boulder, CO-based DMC Global Inc. (BOOM - Free Report) is a diversified technology company. Its operating sector consists of industrial infrastructure and oilfield products and services. The company has a VGM Score of A.
DMC Global has a projected long-term growth rate of 20%. Further, the stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for 2018 earnings moving 9.6% north in a month’s time.
QuinStreet, Inc. (QNST - Free Report) , based in Foster City, CA, is a provider of online direct marketing and media services. The company has a VGM Score of B.
QuinStreet has a projected long-term growth rate of 25%. The stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for fiscal 2018 earnings increasing 20% in two months’ time.
Uruguay-based Arcos Dorados Holdings Inc. (ARCO - Free Report) operates as a franchisee of McDonald's with its operations divided in Brazil; North Latin America division; South Latin America and the Caribbean division. The company has a VGM Score of B.
Arcos Dorados Holdings has a projected long-term growth rate of 19.4%. The stock has experienced positive estimate revisions, with the Zacks Consensus Estimate for 2018 earnings moving 2.7% north in a month.
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.
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 »