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4 Stocks With Rising Cash Flows to Fortify Your Portfolio
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Investing one’s hard-earned money in stocks with high profits and impressive earnings surprise records is a trend during the final leg of a reporting cycle. However, rather than brooding too much on profit numbers, strategically judging a company’s resiliency by assessing its efficacy in generating cash flows can be far more rewarding.
In this regard, stocks like Modine Manufacturing Company (MOD - Free Report) , HNI Corporation (HNI - Free Report) , H&E Equipment Services, Inc. (HEES - Free Report) and Barrett Business Services, Inc. (BBSI - Free Report) are worth buying.
This is because cash indicates a company’s true financial health. It offers the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. In fact, even a profit-generating company might face bankruptcy while meeting obligations, if it is low on cash flow. However, a sturdy cash balance can cushion these firms in case of any market turbulence.
Particularly, analyzing a company’s cash-generating efficiency holds more relevance amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns. Hence, evaluating a company's capacity to generate cash is crucial, not only for safeguarding your investment but also for its potential to grow.
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.
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 industry categories.
Here are our four picks out of the 10 stocks that qualified the screening:
Modine Manufacturing operates primarily in a single industry consisting of the manufacturing and selling of heat transfer equipment. These include heat exchangers for cooling all types of engines, transmissions, auxiliary hydraulic equipment, air conditioning components used in cars, trucks, farm and construction machinery and equipment, and heating and cooling equipment for residential and commercial building heating, ventilating, air conditioning and refrigeration equipment.
The Zacks Consensus Estimate for Modine Manufacturing’s fiscal 2024 earnings has moved 5.6% north in the past week to $3.04 per share. MOD has a VGM Score of A.
HNI Corporation provides products and solutions for home and workplace environments. HNI is a leading global provider and designer of office furniture and the leading manufacturer and marketer of hearth products.
The Zacks Consensus Estimate for HNI Corporation’s 2023 earnings per share has been revised 11.1% upward to $2.40 in the past week. HNI has a VGM Score of A.
H&E Equipment Services is one of the largest integrated equipment services companies in the United States. The company is focused on heavy construction & industrial equipment and rents, sells & provides parts & service support for four core categories of specialized equipment they are hi-lift or aerial platform equipment, cranes, earthmoving equipment & industrial lift trucks.
The Zacks Consensus Estimate for H&E Equipment Services’ current-year earnings has been revised upward by 8.2% in the past month to $4.50 per share. HEES currently has a VGM Score of A.
Barrett Business provides light industrial, clerical and technical employees to a wide range of businesses through staff leasing, contract staffing, site management and temporary staffing arrangements.
The Zacks Consensus Estimate for Barrett Business’ 2023 earnings has been revised upward by 4.7% to $7.10 per share in the past week. BBSI sports 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.
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 With Rising Cash Flows to Fortify Your Portfolio
Investing one’s hard-earned money in stocks with high profits and impressive earnings surprise records is a trend during the final leg of a reporting cycle. However, rather than brooding too much on profit numbers, strategically judging a company’s resiliency by assessing its efficacy in generating cash flows can be far more rewarding.
In this regard, stocks like Modine Manufacturing Company (MOD - Free Report) , HNI Corporation (HNI - Free Report) , H&E Equipment Services, Inc. (HEES - Free Report) and Barrett Business Services, Inc. (BBSI - Free Report) are worth buying.
This is because cash indicates a company’s true financial health. It offers the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. In fact, even a profit-generating company might face bankruptcy while meeting obligations, if it is low on cash flow. However, a sturdy cash balance can cushion these firms in case of any market turbulence.
Particularly, analyzing a company’s cash-generating efficiency holds more relevance amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns. Hence, evaluating a company's capacity to generate cash is crucial, not only for safeguarding your investment but also for its potential to grow.
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.
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 industry categories.
Here are our four picks out of the 10 stocks that qualified the screening:
Modine Manufacturing operates primarily in a single industry consisting of the manufacturing and selling of heat transfer equipment. These include heat exchangers for cooling all types of engines, transmissions, auxiliary hydraulic equipment, air conditioning components used in cars, trucks, farm and construction machinery and equipment, and heating and cooling equipment for residential and commercial building heating, ventilating, air conditioning and refrigeration equipment.
The Zacks Consensus Estimate for Modine Manufacturing’s fiscal 2024 earnings has moved 5.6% north in the past week to $3.04 per share. MOD has a VGM Score of A.
HNI Corporation provides products and solutions for home and workplace environments. HNI is a leading global provider and designer of office furniture and the leading manufacturer and marketer of hearth products.
The Zacks Consensus Estimate for HNI Corporation’s 2023 earnings per share has been revised 11.1% upward to $2.40 in the past week. HNI has a VGM Score of A.
H&E Equipment Services is one of the largest integrated equipment services companies in the United States. The company is focused on heavy construction & industrial equipment and rents, sells & provides parts & service support for four core categories of specialized equipment they are hi-lift or aerial platform equipment, cranes, earthmoving equipment & industrial lift trucks.
The Zacks Consensus Estimate for H&E Equipment Services’ current-year earnings has been revised upward by 8.2% in the past month to $4.50 per share. HEES currently has a VGM Score of A.
Barrett Business provides light industrial, clerical and technical employees to a wide range of businesses through staff leasing, contract staffing, site management and temporary staffing arrangements.
The Zacks Consensus Estimate for Barrett Business’ 2023 earnings has been revised upward by 4.7% to $7.10 per share in the past week. BBSI sports 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.
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.