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For Immediate Release
Chicago, IL – March 7, 2018 - Stocks in this week’s article Kulicke&Soffa (NASDAQ:KLIC) , SP Plus Corporation (NASDAQ:SP) , Arkema SA (OTC:ARKAY) and Modine Manufacturing Company (NYSE:MOD) .
Bet on 4 High-Flying Stocks with Increasing Cash Flows
If achieving profit is a company’s goal then having healthy cash flow is most essential to 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.
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. But 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 profits are being channelized in the right direction.
To figure out this efficiency, one needs to consider a company’s net cash flow. While in any business cash moves in and out, net cash flow explains how much money the company is actually making.
If a company is experiencing a positive cash flow then it denotes an increase in its liquid assets, which gives it 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, 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, this earnings season and beyond, don’t look at profits only before picking stocks. Make sure to look for stocks with dependable and increasing cash flows.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/294603/bet-on-4-highflying-stocks-with-increasing-cash-flows
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.
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