4 Buy-Listed Stocks to Choose in the Event of Impressive Cash Flow Growth


IIf profitability is the objective of a company, having a healthy cash flow is essential to its existence, its development and its success. This is because cash provides the flexibility to make decisions, the means to make investments, and the fuel to keep a company’s engine of growth running. Thus, it can be safely called the cornerstone of any business.

In this regard, actions like PDC Energy, Inc. PDCE, Encore Wire Corporation THREAD, Tecnoglass Inc. TGLS and Universal Logistics Holdings, Inc. ULHs are worth buying.

Investors often flock to companies that are making a profit. However, a profitable business can also succumb to failure if its cash flow is spotty and eventually has to file for bankruptcy. Therefore, one must look beyond earnings figures for prudent investment and examine a company’s efficiency in generating cash flow, as cash provides protection from market chaos and signals that earnings are being funneled into the good direction.

Additionally, analysis of a company’s cash-generating efficiency is more relevant in today’s environment with uncertainties in the global economy, market disruptions and dislocations, and liquidity issues resulting from geopolitical tensions. or the pandemic.

To understand this efficiency, one must consider a company’s net cash flow. While in any business money flows in and out, net cash flow explains how much money a business actually generates.

If a business is experiencing positive cash flow, it denotes an increase in liquidity, which gives it the means to meet debts, cover expenses, reinvest in the business, weather downturns, and ultimately grow. return wealth to shareholders. On the other hand, a negative cash flow indicates a decrease in the liquidity of the company, which reduces its flexibility to support these movements.

However, having a positive cash flow simply does not guarantee the future growth of a business. To follow the growth curve, a company must see its cash flow increase as this indicates management’s efficiency in regulating its cash flow and less dependence on outside funding for the management of its business.

Therefore, keep up to date with the next screen to bet on stocks with rising cash flow.

Screening Parameters:

To find stocks that have seen an increase in cash flow over time, we ran the screen for those whose cash flow during the last reported quarter was at least equal to or greater than the 5-year average cash flow per common share. It implies a positive trend and an increase in liquidity over a period of time.

In addition to this, we have chosen:

Zacks Rank 1: Regardless of whether market conditions are good or bad, stocks with a Zacks rank of #1 (Strong Buy) have a proven track record of outperforming. You can see the full list of today’s Zacks #1 Rank stocks here.

Broker 1 average rating: This indicates that brokers are also very optimistic about the future performance of the company.

Current price greater than or equal to $5: This eliminates low priced stocks.

VGM score of B or better: This score is also of great help in stock selection. Importantly, this rating system helps select winning stocks in their industry categories.

Here are our four picks from the 17 stocks that qualified for the selection:

PDC Energyheadquartered in Denver, CO, is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.

The Zacks consensus estimate for PDC Energy’s 2022 earnings has moved 9.6% north to $17.84 over the past month. PDCE currently carries a VGM score of A.

Yarn Again is a low cost manufacturer of copper electrical building wires and cables. The company is a leading supplier of residential wires for interior electrical wiring in houses, apartments and manufactured homes, as well as construction wires for electrical distribution in commercial and industrial buildings.

Zacks’ consensus estimate for Encore Wire’s 2022 revenue was revised up to $19.18 from $10.74 in a month. WIRE has a VGM score of A.

Tecnoglass is a leading manufacturer of architectural glass, windows and related aluminum products serving the global residential and commercial end markets.

Zacks’ consensus estimate for Tecnoglass’ 2022 earnings was revised up 5.7% to $2.24 in one month. TGLS has a VGM score of A.

Universal logistics is a provider of tailor-made transport and logistics solutions. It offers services across its entire supply chain, including truckload, brokerage, intermodal, dedicated and value-added services.

The Zacks consensus estimate of $4.55 for Universal Logistics’ 2022 earnings has moved 40% north in the past 30 days. ULH 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 the options mentioned herein. An affiliated investment adviser may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.

Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance.

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PDC Energy, Inc. (PDCE): Free Stock Analysis Report

Encore Wire Corporation (WIRE): Free Stock Analysis Report

Tecnoglass Inc. (TGLS): Free Stock Analysis Report

Universal Logistics Holdings, Inc. (ULH): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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