For Immediate Release
Chicago, IL – April 13, 2023 – Stocks in this week’s article are Deutsche Telekom AG (
DTEGY Quick Quote DTEGY - Free Report) , Banco do Brasil S.A. ( BDORY Quick Quote BDORY - Free Report) , Encore Wire Corp. ( WIRE Quick Quote WIRE - Free Report) and Arcos Dorados Holdings Inc. ( ARCO Quick Quote ARCO - Free Report) . Forget Profit, Bet on 4 Stocks with Increasing 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
Deutsche Telekom AG, Banco do Brasil S.A., Encore Wire Corp. and Arcos Dorados Holdings Inc. are worth buying.
This is because although profit is a company's goal, cash is the lifeblood of 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 the 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 health crisis, 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 four picks out of the 18 stocks that qualified the screening:
Deutsche Telekom AG, headquartered in Bonn, Germany, is Europe's largest communications company and one of the largest communications carriers worldwide.
The Zacks Consensus Estimate for 2023 earnings has improved 1.1% over the past two months. Currently, DTEGY has a VGM Score of A.
Banco do Brasil S.A. provides retail and commercial banking services in Brazil and internationally. The services offered include consumer, commercial and agribusiness loans, asset management, foreign exchange, insurance, lease financing and Internet-banking services.
The Zacks Consensus Estimate for Banco do Brasil's 2023 earnings has been revised 8.9% upward in the past two months. Banco do Brasil has an impressive growth rate of 10% for the next five years. Currently, BDORY has a VGM Score of A.
Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of 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 2023 earnings has been revised 28.1% upward in the past two months. WIRE has a VGM Score of A.
Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's, with its operations divided into Brazil, North Latin America division, South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.
The Zacks Consensus Estimate for 2023 earnings has improved 8.2% over the past month to 66 cents per share. Currently, ARCO carries 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/2077442/forget-profit-bet-on-4-stocks-with-increasing-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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year.
See these high-potential stocks free >>.
Follow us on Twitter:
Join us on Facebook:
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit
https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.