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Zacks.com Featured Highlights: Bayer AG, OMV AG, Grupo Financiero Galicia S.A. And Spark New Zealand

Published 07/05/2017, 09:30 PM
Updated 07/09/2023, 06:31 AM
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For Immediate Release

Chicago, IL – July 06, 2017 - Stocks in this week’s article include Bayer AG (DE:BAYGN) (OTCMKTS: BAYRY Free Report ), OMV AG (OTCMKTS: OMVJF Free Report ), Grupo Financiero Galicia S.A. (NASDAQ: GGAL Free Report ) and Spark New Zealand (OTCMKTS: SPKKY Free Report ).

Screen of the Week of Zacks Investment Research:

Buy 4 Stocks with Increasing Cash Flows Ahead of Q2 Earnings

Investors would find it easier to crunch profit numbers and evaluate surprises in the impending Q2 earnings season. However, an assessment of the company’s cash position which reveals its true financial health can be far more rewarding.

In fact, even a profit-making company can have a dearth of cash flow and go bankrupt while meeting its obligations if its profits are not channelized in the right direction. But a company can navigate any market mayhem and still be on the growth curve if it has sufficient cash flow.

This is because, cash gives a company the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. It is indeed the key for its existence, development and success.

Obviously, in any business, cash moves in and out, but it is net cash flow that explains how much money the company is actually making. A positive cash flow indicates an increase in the company’s liquid assets, which provide 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, negative cash flow indicates a decline in the company’s liquidity and in turn lowers its flexibility to support these moves.

Yet, positive cash flow alone is not sufficient to predict a company’s future growth. A company can consistently grow only when positive cash flow is rising. Because increasing cash flow helps reduce dependency on external financing sources and effectively manage finances, operations and investing activities.

Therefore, ahead of the Q2 earnings season, keep yourself ready 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 individual industry categories.

Here are four stocks that qualified the screening:

Bayer AG (OTCMKTS:BAYRY Free Report ), headquartered in Leverkusen, Germany, is a life science company with core competencies in the areas of health care and agriculture. The company has a VGM Score of A.

The Zacks Consensus Estimate for 2017 earnings has increased 5.7% over the past 60 days. Also, Bayer AG has a long-term (3–5 years) expected growth rate of 7.5%.

OMV AG (OTCMKTS:OMVJF Free Report ) is an Austria-based integrated oil company with operations in Upstream, Downstream, Chemicals and Gas & Power. The company has a VGM Score of A.

OMV AG has a long-term (3–5 years) expected growth rate of 7.0%. Also, the stock has witnessed solid positive estimate revisions with the Zacks Consensus Estimate for 2017 earnings increasing 20.9% over the past 60 days.

Grupo Financiero Galicia S.A. (NASDAQ:GGAL Free Report ) is based in Buenos Aires, Argentina and involved in the financial services Industry. Grupo Galicia fully owns the outstanding shares of Banco Galicia, which is its most significant asset. The company has a VGM Score of B.

The stock also experienced solid estimate revisions, reflecting analysts’ bullishness. In fact, the Zacks Consensus Estimate for 2017 earnings has increased 3.4% over the past 60 days.

Spark New Zealand (OTCMKTS:SPKKY Free Report ), headquartered in Auckland, New Zealand, provides digital services. It provides fixed line, mobile, and internet services, voice, interconnect, managed data, and international products and services and telecommunication services. The company has a VGM Score of A.

Spark has a long-term (3–5 years) expected growth rate of 8.3%. Also, the stock has witnessed positive estimate revisions with the Zacks Consensus Estimate for fiscal 2017 earnings increasing 6.8% over the past 30 days.

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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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Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don’t wait for the market to get better before you decide to do better. Start learning how to be a better trader today: https://at.zacks.com/?id=111

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.



Bayer AG (BAYRY): Free Stock Analysis Report

OMV AG (OMVJF): Free Stock Analysis Report

Grupo Financiero Galicia S.A. (GGAL): Free Stock Analysis Report

Spark New Zealand Ltd. (SPKKY): Free Stock Analysis Report

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