Zacks.com Featured Highlights Include: Career Education, OneMain, Tilly's And Middlefield Banc
Zacks Investment Research | Oct 27, 2019 10:44PM ET
For Immediate Release
Chicago, IL – October 28, 2019 - Stocks in this week’s article are Career Education Corp. (NASDAQ:CECO) , OneMain Holdings, Inc. (NYSE:OMF) , Tilly's Inc. (NYSE:TLYS) and Middlefield Banc Corp. (NASDAQ:MBCN) .
Look Beyond Profit: Bet on 4 Stocks with Increasing Cash Flows
We are in the heart of the current reporting cycle, and crunching profit numbers and evaluating surprises might appear a good option to investors. However, looking beyond profits and evaluating a company’s cash position can be far more rewarding. This is because, even though profit is a company’s goal, cash is its lifeblood for existence and a measure of resiliency.
In fact, a dearth of cash flow can compel even a profit-making company to face bankruptcy while meeting its obligations. However, 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.
To find this efficiency, one needs to consider a company’s net cash flow figure. 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 then it denotes an increase in its liquid assets, which gives it 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, 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.
For the rest of this Screen of the Week article please visit Zacks.com at:Zacks Investment Research
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