Zacks.com strengths include Concentrix, Academy Sports and Outdoors, Euroseas and DLH Holdings

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Chicago, IL – February 10, 2022 – Stocks in this week’s article are Concentrix Corp. CNXC, Academy Sports and Outdoors, Inc. ASO, Euroseas Ltd. ESEA and DLH Holdings Corp. DLHC.

Forget profits: bet on these stocks with rising cash flow

We are in the middle of the current reporting cycle and investors are generally interested in betting on stocks based on earnings and surprises. However, looking beyond earnings and determining a company’s ability to generate cash flow can be much more rewarding.

Indeed, cash indicates the true financial health of a company. It offers the flexibility to make decisions, the means to make potential investments, and the fuel to run its growth engine. In fact, even a profit-generating business can face bankruptcy while meeting its obligations if it has little cash. However, a strong cash balance can protect businesses during turbulent market times.

In this regard, actions like Concentrix Corp., Sports and Outdoors Academy, Inc., Euroseas Ltd. and DLH Holdings Corp. are worth buying.

Additionally, the uncertainties in the global economy, market disruptions and dislocations, and liquidity issues that have resulted from the coronavirus pandemic have further established the relevance of analyzing the cash-generating efficiency of a business.

To understand this efficiency, one must consider a company’s net cash flow. While in any business money flows in and out, net cash flow explains how much money a business actually generates.

If a company is experiencing positive cash flow, it denotes an increase in its liquidity, which gives it the means to meet its debts, cover its expenses, reinvest in the business, withstand downturns and finally return wealth to shareholders. On the other hand, a negative cash flow indicates a decrease in the liquidity of the company, which reduces its flexibility to support these movements.

However, having a positive cash flow simply does not guarantee the future growth of a business. To follow the growth curve, a company must see its cash flow increase as this indicates management’s efficiency in regulating its cash flow and less dependence on outside funding for the management of its business.

Therefore, keep up to date with the next screen to bet on stocks with rising cash flow.

For the rest of this article on Screen of the Week, please visit Zacks.com at: https://www.zacks.com/stock/news/1864749/forget-profit-bet-on-these-4-stocks-with-rising-cash-flows

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Euroseas Ltd. (ESEA): Free Stock Analysis Report

Concentrix Corporation (CNXC): Free Stock Analysis Report

DLH Holdings Corp. (DLHC): Free Stock Analysis Report

Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report

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