Zacks.com Featured Highlights: Huntsman, Nova Measuring Instruments And Modine Manufacturing
Zacks Investment Research | Oct 27, 2017 08:50AM ET
For Immediate Release
Chicago, IL – October 27, 2017 - Stocks in this week’s article include Huntsman Corporation (NYSE:HUN) , Nova Measuring Instruments Ltd. (NASDAQ:NVMI) and Modine Manufacturing Company (NYSE:MOD) .
Screen of the Week by Zacks Investment Research:
Look Beyond Earnings: 3 Stocks with Increasing Cash Flows
We are in one of the busiest weeks of the current-reporting cycle, and crunching profit numbers and evaluating surprises might seem appropriate right now for investors. However, looking beyond the profit numbers and figuring out a company’s efficiency in generating cash flows can be far more rewarding.
This is because even a profit-making company can face cash trouble and end up being bankrupt while meeting its obligations. But a company with solid cash flow can endure any market mayhem besides enjoying flexibility in decision making, chasing potential investments and fueling its growth engine. In fact, cash is indispensable factor for any company. It gives strength and vitality to a company and is the key to its existence, development and success.
To find out the efficiency of a company, one needs to consider its net cash flow. While, in any business, cash moves in and out, it is net cash flow that explains how much money the company is actually generating.
A positive cash flow indicates an increase in the company’s liquid assets, which provide 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, negative cash flow indicates a decline in the company’s liquidity and in turn lowers its flexibility to support these moves.
However, positive cash flow alone is not sufficient to predict a company’s growth. A company can competently grow only when this positive cash flow is rising, because this improvement indicates management’s efficiency in regulating its cash movements and lesser dependency on external financing sources for running its business.
So, while picking stocks, look beyond profits and select companies with dependable and increasing 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:
For the rest of this Screen of the Week article please visit Zacks.com at:Original post
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