4 High-Flying Stocks With Rising Cash Flows to Buy Now

2022-09-19 09:54:42 By : Mr. Hengge Y

If achieving profit is a company’s goal, then having a healthy cash flow is the most essential for its existence, development and success. Cash offers a company the flexibility to make decisions, the means to make investments, the fuel to run its growth engine, and can, indeed, be called the lifeblood of any business. In this regard, stocks like AMN Healthcare Services, Inc. AMN, Encore Wire Corporation WIRE, Veritiv Corporation VRTV and SP Plus Corporation SP are worth buying. Often investors flock to companies with solid top-line growth and increasing profit numbers. However, even a profit-making company can have a scarcity of cash flow and face bankruptcy while meeting its obligations. Therefore, to invest in the right stocks, one must go beyond profit numbers and look at a company’s efficiency in generating cash flows because cash not only guards it from market mayhem, but also suggests that profits are being channelized in the right direction. In fact, cash indicates a company’s true financial health. This has become all the more important amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions or the pandemic. 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.

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 18 stocks that qualified the screening: AMN Healthcare Services is a travel healthcare staffing company. AMN Healthcare Services recruits and places nurses, physicians, and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups, and other healthcare facilities. The Zacks Consensus Estimate of $11.16 per share for AMN Healthcare Services’ current-year earnings has moved 7.2% in the past month. AMN has a VGM Score of A. Encore Wire is a low-cost manufacturer of copper electrical building wire and cable. The company is a significant supplier of residential wire for interior electrical wiring in homes, apartments and manufactured housing, as well as building wire for electrical distribution in commercial and industrial buildings. The Zacks Consensus Estimate for Encore Wire’s 2022 earnings has been revised upward to $26.86 from $19.18 in the past month. WIRE has a VGM Score of B. Veritiv Corporation engages in offering North American business-to-business distribution solutions. It provides packaging, print and print management, publishing, supply chain, facility and logistics solutions that span the entire lifecycle of core business operations. The Zacks Consensus Estimate for the current-year earnings has moved up 15.5% to $21.25 in the past month. Currently, VRTV carries a VGM Score of B. SP Plus Corporation provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry.   The Zacks Consensus Estimate for SP Plus’ 2022 earnings has been revised upward to $2.83 per share from $2.69 in the past month. SP has a VGM Score of A. Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software. The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out. Click here to sign up for a free trial to the Research Wizard today. 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report   AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report   Encore Wire Corporation (WIRE) : Free Stock Analysis Report   SP Plus Corporation (SP) : Free Stock Analysis Report   Veritiv Corporation (VRTV) : Free Stock Analysis Report   To read this article on Zacks.com click here.   Zacks Investment Research

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