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4 Stocks to Pick With Rising Cash Flows This Thanksgiving Week
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Cash is the lifeblood for a company’s existence, development and success. It gives strength and vitality to a company, the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. Thus, this indicates cash is a company’s true financial health.
Investors flock to companies that earn profits, but even a profitable business can succumb to failure if its cash flow is uneven and eventually file for bankruptcy. However, one can effectively judge a company’s resilience by evaluating its power of generating cash flows. This is because cash not only guards a company from market mayhem, but also indicates that profits are being channelized in the right direction.
Moreover, with the coronavirus crisis giving rise to uncertainties in the global economy, market disruptions and dislocations, and liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance.
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 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, 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 the four out of eight stocks that qualified the screening:
Matson Inc. (MATX - Free Report) provides ocean transportation and logistics services. It offers shipping services in Hawaii, Guam, and Micronesia islands, and expedited service from China to southern California. At present, the stock has a VGM Score of A. The Zacks Consensus Estimate of $3.00 for 2020 earnings has been revised 11.5% upward over the past 30 days.
Aviat Networks, Inc. (AVNW - Free Report) is a global supplier of wireless network solutions and network management software, backed by a suite of professional services and support. Currently, the stock has a VGM Score of A.The Zacks Consensus Estimate of $2.95 for fiscal 2021 earnings moved 18% north in 30 days’ time.
Hillenbrand Inc. (HI - Free Report) is a global diversified company, with its portfolio comprising industrial businesses like Coperion, Milacron Injection Molding & Extrusion, and Mold-Masters, along with Batesville, a recognized leader in the death care industry in North America. The stock currently has a VGM Score of A.The Zacks Consensus Estimate of $3.13 for fiscal 2021 earnings moved nearly 2% upward over the past week.
Turtle Beach Corporation (HEAR - Free Report) is an audio technology company, and has emerged as one of the world’s leading gaming audio and accessory provider. The stock currently carries a VGM Score of B. The Zacks Consensus Estimate for ongoing-year earnings has been revised significantly upward to $1.84 from 88 cents in the past 30 days.
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 to Pick With Rising Cash Flows This Thanksgiving Week
Cash is the lifeblood for a company’s existence, development and success. It gives strength and vitality to a company, the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. Thus, this indicates cash is a company’s true financial health.
Investors flock to companies that earn profits, but even a profitable business can succumb to failure if its cash flow is uneven and eventually file for bankruptcy. However, one can effectively judge a company’s resilience by evaluating its power of generating cash flows. This is because cash not only guards a company from market mayhem, but also indicates that profits are being channelized in the right direction.
Moreover, with the coronavirus crisis giving rise to uncertainties in the global economy, market disruptions and dislocations, and liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance.
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 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, 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 the four out of eight stocks that qualified the screening:
Matson Inc. (MATX - Free Report) provides ocean transportation and logistics services. It offers shipping services in Hawaii, Guam, and Micronesia islands, and expedited service from China to southern California. At present, the stock has a VGM Score of A. The Zacks Consensus Estimate of $3.00 for 2020 earnings has been revised 11.5% upward over the past 30 days.
Aviat Networks, Inc. (AVNW - Free Report) is a global supplier of wireless network solutions and network management software, backed by a suite of professional services and support. Currently, the stock has a VGM Score of A.The Zacks Consensus Estimate of $2.95 for fiscal 2021 earnings moved 18% north in 30 days’ time.
Hillenbrand Inc. (HI - Free Report) is a global diversified company, with its portfolio comprising industrial businesses like Coperion, Milacron Injection Molding & Extrusion, and Mold-Masters, along with Batesville, a recognized leader in the death care industry in North America. The stock currently has a VGM Score of A.The Zacks Consensus Estimate of $3.13 for fiscal 2021 earnings moved nearly 2% upward over the past week.
Turtle Beach Corporation (HEAR - Free Report) is an audio technology company, and has emerged as one of the world’s leading gaming audio and accessory provider. The stock currently carries a VGM Score of B. The Zacks Consensus Estimate for ongoing-year earnings has been revised significantly upward to $1.84 from 88 cents in the past 30 days.
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.