For Immediate Release
Chicago, IL – November 13, 2017 - Stocks in this week’s article include: Rosetta Stone Inc. (RST - Free Report) , Nova Measuring Instruments Ltd. (NVMI - Free Report) and Yaskawa Electric Corporation .
Screen of the Week of Zacks Investment Research:
3 Stocks Back by Increasing Cash Flows to Buy Now
Laying a wager on stocks based on profit numbers and surprises might seem appropriate in this final stretch of the current reporting cycle. But looking beyond profits and evaluating a company’s cash position can be far more rewarding. Because even though profit is a company’s goal, cash is its lifeblood, measure of resiliency and indicator of true financial health.
In fact, even a profit-making company can have a dearth of cash flow and face bankruptcy while meeting its obligations. But a healthy cash position indicates that profits are being efficiently channelized to the company’s reserves, which not only shield it from market mayhem but also offer flexibility to make decisions, chase potential investments and run its growth engine.
And to find out this efficiency, one needs to consider a company’s net cash flow. While cash moves in and out of any business, it is net cash flow that indicates how much money a company is actually generating.
Experiencing a positive cash flow denotes an increase in the company’s liquid assets. This provides 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, incurring negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, only having a positive cash flow does not secure a company’s prospects. To ride the growth curve, a company must have increasing cash flow which indicates management’s efficiency in regulating its cash movements and reducing dependency on external financing sources.
Thus, to scoop up big gains, look beyond profits and select companies with dependable and increasing cash flow.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/282451/3-stocks-backed-by-increasing-cash-flows-to-buy-now
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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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