Zacks.com featured highlights Unum, G-III Apparel, StoneCo and Hudson Technologies
For Immediate Release
Chicago, IL – June 27, 2023 – Stocks in this week’s article are Unum Group UNM, G-III Apparel Group, Ltd. GIII, StoneCo Ltd. STNE and Hudson Technologies, Inc. HDSN.
4 Low Price-to-Cash Flow Stocks to Pick for Optimum Returns
Value style is considered one of the best practices when it comes to picking stocks. Value investing is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon.
There are different valuation metrics to determine a stock’s inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company’s financial position. For this, the Price to Cash Flow (or P/CF) ratio is one of the key metrics. Unum Group, G-III Apparel Group, Ltd., StoneCo Ltd. and Hudson Technologies, Inc. boast a low P/CF ratio.
This metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis – the lower the number, the better. One of the important factors that makes P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same.
Positive cash flow indicates an increase in a company’s liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.
However, solely based on the P/CF metric, an investment decision may not fetch the desired results. To identify stocks trading at a discount, you should expand your search criteria and consider the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value trap.
Here are four of the six stocks that qualified the screening:
Unum Group, which provides financial protection benefit solutions, sports a Zacks Rank #1 and has an expected EPS growth rate of 8.4% for three-five years. The company has a trailing four-quarter earnings surprise of 18.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Unum Group’s current financial year sales and EPS suggests growth of 2.5% and 20.6%, respectively, from the year-ago period. Unum Group has a Value Score of A. Shares of UNM have gained 33.9% in the past year.
G-III Apparel, which designs, sources, and markets women's and men's apparel, carries a Zacks Rank #1. It has an expected EPS growth rate of 15% for three-five years. The company has a trailing four-quarter earnings surprise of 47.4%, on average.
The Zacks Consensus Estimate for G-III Apparel’s current financial year sales and EPS suggests growth of 1.9% and 0.4%, respectively, from the year-ago period. G-III Apparel has a Value Score of A. The stock has fallen 11.8% in the past year.
StoneCo, a leading provider of financial technology and software solutions, carries a Zacks Rank #2 and has an expected EPS growth rate of 55.2% for three-five years. The company has a trailing four-quarter earnings surprise of 11.8%, on average.
The Zacks Consensus Estimate for StoneCo’s current financial year sales and EPS suggests growth of 3.6% and 112.1%, respectively, from the year-ago period. STNE has a Value Score of A. Shares of STNE have rallied 53.3% in the past year.
Hudson Technologies, a leading provider of innovative and sustainable refrigerant products and services, carries a Zacks Rank #2. It has an expected EPS growth rate of 30% for three-five years. The company has a trailing four-quarter earnings surprise of 70.3%, on average.
The Zacks Consensus Estimate for Hudson Technologies’ current financial year sales suggests growth of 2.5% from the year-ago period. Hudson Technologies has a Value Score of A. Shares of HDSN have risen 4.7% in the past year.
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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/2113115/4-low-price-to-cash-flow-stocks-to-pick-for-optimum-returns
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Unum Group (UNM) : Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
Hudson Technologies, Inc. (HDSN) : Free Stock Analysis Report
StoneCo Ltd. (STNE) : Free Stock Analysis Report
