Yahoo Finance Solid Cash-Flow Growth Makes These 4 Stocks Worth Buying Now
Cash is the lifeblood of any business. It offers strength, vitality and flexibility to make investment decisions, as well as the fuel to run its growth engine. Moreover, cash shields a company from market turmoil and indicates that profits are being channelized in the right direction.
In this regard, stocks like Adtalem Global Education Inc. ATGE, HNI Corporation HNI, Diebold Nixdorf, Incorporated DBD and GigaCloud Technology Inc. GCT are worth buying.
In fact, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows to invest in the right stocks. This is because even a profit-making company can face a dearth of cash flow and fail to meet its obligations. However, a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed.
Moreover, amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions, analyzing a company’s cash-generating efficiency holds more relevance in the current context.
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 eight stocks that qualified the screening:
Adtalem Global Education, based in Chicago, IL, is a leading healthcare education provider and workforce solutions innovator. The institutions of the company offer a wide array of programs across medical and healthcare services.
The Zacks Consensus Estimate for Adtalem Global’s fiscal 2024 sales and EPS suggests growth of 8.3% and 16.4%, respectively, from the year-ago period. ATGE has a VGM Score of A.
HNI Corp. provides products and solutions for home and workplace environments. HNI, headquartered in Muscatine, IA, 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 Corp.’s 2024 earnings per share has been revised 5.8% upward to $3.10 in the past month. HNI has a VGM Score of A.
Diebold Nixdorf, based in North Canton, OH, is engaged in automating, digitizing and transforming the way people bank and shop worldwide. DBD operates through two segments — Banking and Retail.
Diebold Nixdorf’s 2024 earnings estimates have jumped 47% upward over the past month. DBD has a VGM Score of A.
GigaCloud, headquartered in El Monte, CA, is a pioneer of global end-to-end B2B e-commerce solutions for large parcel merchandise. Its platform integrates various aspects of e-commerce, including product discovery, payment processing and logistics, to streamline the buying and selling process for large items.
The Zacks Consensus Estimate for GCT’s 2024 earnings per share has moved up 9.1% over the past week to $3.25. GigaCloud has a VGM Score of A.
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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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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Diebold Nixdorf, Incorporated (DBD) : Free Stock Analysis Report
HNI Corporation (HNI) : Free Stock Analysis Report
Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
GigaCloud Technology Inc. (GCT) : Free Stock Analysis Report
