For Immediate Release
Chicago, IL – April 14, 2022 – Stocks in this week’s article are PDC Energy, Inc. (
PDCE Quick Quote PDCE - Free Report) , Louisiana-Pacific Corp. ( LPX Quick Quote LPX - Free Report) , Academy Sports and Outdoors, Inc. ( ASO Quick Quote ASO - Free Report) , Encore Wire Corp. ( WIRE Quick Quote WIRE - Free Report) and TimkenSteel Corp. ( TMST Quick Quote TMST - Free Report) . Look Beyond Profit: Bet on 5 Stocks with Rising Cash Flows
Crunching profit numbers and evaluating surprises might be the preferred methods for scooping up big gains in the impending Q1 earnings season. However, looking beyond profits and assessing a company's cash position can be far more rewarding because these indicate its true financial health.
In this regard, stocks like
PDC Energy, Inc., Louisiana-Pacific Corp., Academy Sports and Outdoors, Inc., Encore Wire Corp., and TimkenSteel Corp. are worth buying.
This is because although profit is a company's goal, cash is the lifeblood for its existence, development and success, and indeed a measure of its resilience. In fact, even a profitable business can fail if its cash flow is uneven and eventually file for bankruptcy. Nevertheless, a company with a healthy cash position has the capability to effectively tide over any market mayhem and still be on its growth curve, besides enjoying flexibility to make decisions, chase potential investments and run its growth engine.
Furthermore, with uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions or the pandemic, analyzing a company's cash-generating efficiency holds more relevance in the current context.
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, it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in the 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.
Here are our five picks out of the 14 stocks that qualified the screening: PDC Energy, Inc., headquartered in Denver, CO, is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.
The Zacks Consensus Estimate for PDC Energy's 2022 earnings has moved 5.4% north to $15.39 over the past week. PDCE currently carries a VGM Score of A.
Louisiana-Pacific Corp. is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction.
The Zacks Consensus Estimate for Louisiana-Pacific's 2022 earnings has been revised 4.7% upward to $13.02 per share in a week's time. LPX currently has a VGM Score of A.
Academy Sports and Outdoors is a sporting goods and outdoor recreation retailer principally operating in the United States. The company's product assortment focuses on outdoor, apparel, footwear and sports & recreation.
The Zacks Consensus Estimate for Academy Sports and Outdoors' fiscal 2022 earnings has been revised 14.5% upward in the past month. ASO carries a VGM Score of B.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of both residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings.
The Zacks Consensus Estimate for Encore Wire's 2022 earnings has been revised upward to $10.74 from $9.76 in two months' time. WIRE has a VGM Score of A.
TimkenSteel Corp. engages in manufacturing alloy steel, as well as carbon and micro-alloy steel. TMST provides air-melted alloy steel bars, tubes and precision components, as well as value-added services, including thermal treatment and machining. TimkenSteel's customers include companies in the market sectors: oil & gas; automotive; industrial equipment; mining; construction; rail; aerospace and defense; heavy truck; agriculture, and power generation.
The Zacks Consensus Estimate for TimkenSteel's 2022 earnings has moved up 7.6% over the past month. TMST currently has a VGM Score of A.
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 For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1898458/look-beyond-profit-bet-on-5-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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
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