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Zacks.com featured highlights Unum, G-III Apparel, StoneCo and Hudson Technologies

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For Immediate Release

Chicago, IL – June 27, 2023 – Stocks in this week’s article are Unum Group (UNM - Free Report) , G-III Apparel Group, Ltd. (GIII - Free Report) , StoneCo Ltd. (STNE - Free Report) and Hudson Technologies, Inc. (HDSN - Free Report) .

4 Low Price-to-Cash Flow Stocks to Pick for Optimum Returns

Value style is considered one of the best practices when it comes to picking stocks. Value investing is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon.

There are different valuation metrics to determine a stock’s inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company’s financial position. For this, the Price to Cash Flow (or P/CF) ratio is one of the key metrics. Unum Group, G-III Apparel Group, Ltd., StoneCo Ltd. and Hudson Technologies, Inc. boast a low P/CF ratio.

This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. One of the important factors that makes P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.

Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same.

Positive cash flow indicates an increase in a company’s liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.

However, solely based on the P/CF metric, an investment decision may not fetch the desired results. To identify stocks trading at a discount, you should expand your search criteria and consider the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.

Here are four of the six stocks that qualified the screening:

Unum Group, which provides financial protection benefit solutions, sports a Zacks Rank #1 and has an expected EPS growth rate of 8.4% for three-five years. The company has a trailing four-quarter earnings surprise of 18.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Unum Group’s current financial year sales and EPS suggests growth of 2.5% and 20.6%, respectively, from the year-ago period. Unum Group has a Value Score of A. Shares of UNM have gained 33.9% in the past year.

G-III Apparel, which designs, sources, and markets women's and men's apparel, carries a Zacks Rank #1. It has an expected EPS growth rate of 15% for three-five years. The company has a trailing four-quarter earnings surprise of 47.4%, on average.

The Zacks Consensus Estimate for G-III Apparel’s current financial year sales and EPS suggests growth of 1.9% and 0.4%, respectively, from the year-ago period. G-III Apparel has a Value Score of A. The stock has fallen 11.8% in the past year.

StoneCo, a leading provider of financial technology and software solutions, carries a Zacks Rank #2 and has an expected EPS growth rate of 55.2% for three-five years. The company has a trailing four-quarter earnings surprise of 11.8%, on average.

The Zacks Consensus Estimate for StoneCo’s current financial year sales and EPS suggests growth of 3.6% and 112.1%, respectively, from the year-ago period. STNE has a Value Score of A. Shares of STNE have rallied 53.3% in the past year.

Hudson Technologies, a leading provider of innovative and sustainable refrigerant products and services, carries a Zacks Rank #2. It has an expected EPS growth rate of 30% for three-five years. The company has a trailing four-quarter earnings surprise of 70.3%, on average.

The Zacks Consensus Estimate for Hudson Technologies’ current financial year sales suggests growth of 2.5% from the year-ago period. Hudson Technologies has a Value Score of A. Shares of HDSN have risen 4.7% in the past year.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.

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/2113115/4-low-price-to-cash-flow-stocks-to-pick-for-optimum-returns

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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Strong Stocks that Should Be in the News

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