Yahoo Finance Scoop Up Big Gains With 4 Stocks Enjoying Rising Cash Flows
If achieving profit is a company’s goal, then having a healthy cash flow is most essential for its existence, development and success. This is because cash offers strength, vitality and flexibility to make investment decisions as well as the fuel to run its growth engine.
In this regard, stocks like Dycom Industries, Inc. DY, HNI Corporation HNI, Hamilton Insurance Group, Ltd. HG and GigaCloud Technology Inc. GCT are worth buying.
Admittedly, investors flock to companies that earn profits but even a profitable business can succumb to failure if its cash flow is irregular and eventually file for bankruptcy. However, a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed. This is because cash not only shields a company from market mayhem but also indicates that its profits are being channeled in the right direction.
Moreover, analyzing a company’s cash-generating efficiency holds more relevance in the current context amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions.
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:
Dycom Industries is a specialty contracting firm operating in the telecom industry. The company provides diverse services such as engineering, construction, maintenance and installation services for the cable and telephone companies.
The Zacks Consensus Estimate for Dycom Industries’ fiscal 2025 earnings has moved up 7.2% to $7.14 per share over the past two months. DY has a VGM Score of A.
HNI Corp. 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 Corp.’s 2024 earnings per share has been revised 5.8% upward to $3.10 in the past week. HNI has a VGM Score of A.
Hamilton Insurance underwrites specialty insurance and reinsurance risks principally in Bermuda and internationally. It has three underwriting platforms Hamilton Global Specialty, Hamilton Select and Hamilton Re.
The Zacks Consensus Estimate for its current-year earnings has improved 16.2% over the past month to $3.08. HG has a VGM Score of B.
GigaCloud 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 30.7% over the past two months to $2.98. 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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Dycom Industries, Inc. (DY) : Free Stock Analysis Report
HNI Corporation (HNI) : Free Stock Analysis Report
GigaCloud Technology Inc. (GCT) : Free Stock Analysis Report
Hamilton Insurance Group, Ltd. (HG) : Free Stock Analysis Report
