For Immediate Release
Chicago, IL – October 19, 2021 – Stocks in this week’s article are Academy Sports and Outdoors, Inc. (
ASO Quick Quote ASO - Free Report) , Citi Trends, Inc. ( CTRN Quick Quote CTRN - Free Report) , Titan Machinery Inc. ( TITN Quick Quote TITN - Free Report) and Grindrod Shipping Holdings Ltd. ( GRIN Quick Quote GRIN - Free Report) . Look Beyond Earnings: Bet on These 4 Stocks with Rising Cash Flows
Investors can be lured by profits and earnings surprises in the ongoing reporting cycle. However, during this earnings season and beyond, betting on stocks with a healthy cash level can be far more rewarding because cash is the lifeblood for a company’s existence, a measure of resiliency, and a revelation of its true financial health.
In fact, even after reaping profits, a company can face a dearth of cash flow and be bankrupt, while meeting its obligations if its profits are not channelized in the right direction. However, a company with adequate cash flows can effectively tide over any market mayhem besides enjoying flexibility in decision making and chasing potential investments.
Analyzing a company’s cash-generating efficiency has indeed become more relevant amid the global health crisis that has given rise to uncertainties in the world economy, market disruptions and dislocations, as well as liquidity concerns. Therefore, looking at a company’s ability to produce cash is important not only in terms of protecting your money but also for multiplying it.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1811600/look-beyond-earnings-bet-on-4-stocks-with-rising-cash-flows 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. About Screen of the Week
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