For Immediate Release
4 Stocks to Pick with Rising Cash Flows This Thanksgiving Week
Cash is the lifeblood for a company’s existence, development and success. It gives strength and vitality to a company, the flexibility to make decisions, the means to make potential investments and the fuel to run its growth engine. Thus, this indicates cash is a company’s true financial health.
Investors flock to companies that earn profits, but even a profitable business can succumb to failure if its cash flow is uneven and eventually file for bankruptcy. However, one can effectively judge a company’s resilience by evaluating its power of generating cash flows. This is because cash not only guards a company from market mayhem, but also indicates that profits are being channelized in the right direction.
Moreover, with the coronavirus crisis giving rise to uncertainties in the global economy, market disruptions and dislocations, and liquidity concerns, analyzing a company’s cash-generating efficiency holds more relevance.
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 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, keep yourself abreast with the following screen to bet on stocks with rising cash flows.
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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.
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Contact: Jim Giaquinto
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