Chicago, IL – December 20, 2024 – Stocks in this week’s article are StoneX Group Inc. SNEX, DXP Enterprises, Inc. DXPE, Climb Global Solutions, Inc. CLMB and Euroseas Ltd. ESEA.
After slashing its overnight borrowing rate by a quarter point yesterday, the Federal Reserve’s indications of fewer reductions in the upcoming year have sent the market in jitters. However, instead of brooding too much on this, investors can benefit from stocks that are cash cows and offer higher returns.
Cash is the lifeblood of any business. It offers strength, vitality and flexibility to make investment decisions, and the fuel to run its growth engine. Moreover, cash shields a company from market turmoil and indicates that profits are being channeled in the right direction.
In this regard, stocks like StoneX Group Inc., DXP Enterprises, Inc., Climb Global Solutions, Inc. and Euroseas Ltd. are worth buying.
One must go beyond profit numbers and look into a company’s efficiency in generating cash flows to invest in the right stocks. This is because even a profit-making company can have a dearth of cash flow and fail to meet its obligations. However, a company’s resiliency can be fairly judged when its efficacy in generating cash flows is assessed. This holds more relevance in the current context amid uncertainties in the global economy, market disruptions and dislocations.
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 four out of nine stocks that qualified for the screening:
StoneX Group provides financial services. Through its subsidiaries, the company offers execution, post-trade settlement, clearing and custody services.
The Zacks Consensus Estimate for StoneX Group’s fiscal 2025 earnings has moved 7.9% north in the past month and currently stands at $8.04 per share. SNEX has a VGM Score of A.
DXP Enterprises provides innovative pumping solutions, supply-chain services, and maintenance, repair, operating and production services.
The consensus estimate for DXP Enterprises’ current-year earnings has been revised 14.3% upward over the past month. DXPE has a VGM Score of A.
Climb Global Solutions is a value-added IT distribution and solutions company specializing in emerging and disruptive technologies. The company provides IT distribution and solutions for emerging companies, principally in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.
The Zacks Consensus Estimate for the current year has improved 26.2% over the past two months. CLMB has a VGM Score of B.
Euroseas was formed under the laws of the Republic of the Marshall Islands to consolidate the ship-owning interests of the Pittas family of Athens, Greece, which has been in the shipping business for the last 136 years. It operates in the dry cargo, dry bulk and container shipping markets.
The Zacks Consensus Estimate for Euroseas’ current-year earnings has moved 1.2% north in the past month. ESEA currently has a VGM Score of B.
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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/2385663/forget-the-fed-bet-on-these-4-stocks-with-increasing-cash-flows?art_rec=quote-stock_overview-zacks_news-ID02-txt-2385663
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