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Find Strong Stocks with this First Profit Screener
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The third quarter earnings results continue to come in stronger than projected and the outlook for the fourth quarter and beyond is steadily improving. And stocks posted their best week since April last week, before they climbed to new records Monday on the back of Pfizer’s Covid-19 vaccine announcement.
The news helped travel and leisure stocks soar. Meanwhile, Wall Street seems happy enough with the prospects of divided government. All of this, along with an accommodating interest rate environment, could set up a bullish outlook.
With this in mind, let’s use our ‘First Profit’ screener to help find stocks that investors might want to consider buying after they posted positive earnings for the first time ever, or for some time.
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the roughly 40 stocks that made it through this week's screen…
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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.
It's hard to believe, even for us at Zacks. But from -Q2 2020, while the market gained % 5.5% per year, our top stock-picking strategy averaged +51.7% per year.
How has that screen done lately? From 2017-Q2 2020, it more than tripled the market's +44.0% gain with a soaring +156.8% return.
Image: Bigstock
Find Strong Stocks with this First Profit Screener
The third quarter earnings results continue to come in stronger than projected and the outlook for the fourth quarter and beyond is steadily improving. And stocks posted their best week since April last week, before they climbed to new records Monday on the back of Pfizer’s Covid-19 vaccine announcement.
The news helped travel and leisure stocks soar. Meanwhile, Wall Street seems happy enough with the prospects of divided government. All of this, along with an accommodating interest rate environment, could set up a bullish outlook.
With this in mind, let’s use our ‘First Profit’ screener to help find stocks that investors might want to consider buying after they posted positive earnings for the first time ever, or for some time.
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the roughly 40 stocks that made it through this week's screen…
Roku, Inc. (ROKU - Free Report)
Translate Bio, Inc. (TBIO - Free Report)
FibroGen, Inc. (FGEN - Free Report)
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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' Super Screen
It's hard to believe, even for us at Zacks. But from -Q2 2020, while the market gained % 5.5% per year, our top stock-picking strategy averaged +51.7% per year.
How has that screen done lately? From 2017-Q2 2020, it more than tripled the market's +44.0% gain with a soaring +156.8% return.
Free – See the Stocks It Turned Up for Today >>