Chicago, IL – January 30, 2024 – Stocks in this week’s article are Griffon Corp. GFF, Photronics, Inc. PLAB, The Andersons, Inc. ANDE and AZZ Inc. AZZ.
Look Beyond Profit: Bet on 4 Stocks with Increasing Cash Flows
Crunching profit numbers and evaluating surprises might appear a good option in the ongoing reporting cycle but these do not ensure that the profits are being efficiently channeled to the reserves for funding growth. This is because even a profit-making company can have a deficiency of cash flow and go bankrupt while meeting its obligations.
Therefore, one must look at a company's proficiency in generating cash flows before investing in the right stocks. This is because cash is a prerequisite for any company. It gives strength and vitality and is the key to its existence, development and success.
In this regard, stocks like Griffon Corp., Photronics, Inc., The Andersons, Inc. and AZZ Inc. are worth buying.
In fact, the uncertainties in the global economy, market disruptions and dislocations, and liquidity have all the more established the relevance of analyzing a company's cash-generating efficiency.
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.
Here are our four picks out of the 14 stocks that qualified the screening:
Griffon Corp, a diversified management and holding company, operates through wholly-owned subsidiaries. It provides consumer and professional, as well as home and building products.
The Zacks Consensus Estimate for Griffon Corp's fiscal 2024 earnings per share has been revised 13% upward to $4.62 in the past two months. GFF has a VGM Score of A.
Photronics is a leading worldwide manufacturer of photomasks. Photomasks are high-precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components.
The Zacks Consensus Estimate for Photronics' fiscal 2024 earnings has moved up by 15.6% to $2.60 per share in the past two months. PLAB currently has a VGM Score of A.
The Andersons is a regional grain merchandiser with diversified businesses in agriculture, plant nutrient formulation and distribution, turf product production, railcar marketing and general merchandise retailing that generate revenues. The company maintains grain and production facilities throughout the Midwest and six retail locations in northern and central Ohio.
The Zacks Consensus Estimate for ANDE Group's 2024 earnings has moved up by 13.5% to $3.86 per share in the past two months. At present, ANDE flaunts a VGM Score of A.
AZZ Inc. is a global provider of metal coating services, welding solutions, specialty electrical equipment and highly engineered services to the markets of power generation, transmission, distribution and industrial in protecting metal and electrical systems used to build and enhance the world's infrastructure.
The Zacks Consensus Estimate for AZZ's fiscal 2024 earnings per share has moved up 5.4% over the past month to $4.30. AZZ has a VGM Score of A.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2217252/look-beyond-profit-bet-on-4-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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