Investing one’s hard-earned money in stocks with high profits and impressive earnings surprise records is a common practice during the final leg of a reporting cycle. However, rather than brooding too much on profit numbers, judging a company’s resiliency by assessing its efficacy in generating cash flow can be far more rewarding.
In this regard, stocks like BrightSpring Health Services, Inc. BTSG, StoneX Group Inc. SNEX, Vista Energy, S.A.B. de C.V. VIST and Orion Group Holdings, Inc. ORN emerge as compelling picks, supported by improving cash flow trends.
This is because cash indicates a company’s true financial health. It offers the flexibility to make decisions, the means to make potential investments, as well as the fuel to run its growth engine. Even a profit-generating company might face bankruptcy while meeting obligations if it is low on cash flow. Nevertheless, a sturdy cash balance can cushion these firms in case of any market turbulence.
With uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns amid the ongoing geopolitical tensions, analyzing a company’s cash-generating efficiency holds more relevance in the current context.
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.
Screening Parameters:
To find stocks that have seen increasing cash flow over time, we ran the screen for those whose cash flow in the latest reported quarter was at least equal to or greater than the five-year average cash flow per common share. This implies a positive trend and increasing cash over a period of time.
In addition to this, we chose:
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.
Current Price greater than or equal to $5: This sieves out low-priced stocks.
VGM Score of B or better: This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their industry categories.
Here are four out of the six stocks that qualified the screening:
BrightSpring Health Services provides complementary home and community-based pharmacy and health solutions. The company continues to benefit from strong demand for home-based care, a broad service platform and a focus on expanding integrated healthcare offerings.
The Zacks Consensus Estimate for BrightSpring’s 2026 earnings has been revised upward by 1.9% to $1.64 over the past seven days. BTSG has a VGM Score of A.
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 2026 earnings has moved northward by 3.4% to $6.00 per share over the past seven days. SNEX has a VGM Score of B.
Vista Energy is a leading exploration and production company with a strong footprint in Vaca Muerta, which is one of the largest shale oil and gas resources outside of North America. Spanning 205,600 Vaca Muerta acres, the company has about 1,150 premium untapped drilling sites, highlighting a solid production outlook.
The Zacks Consensus Estimate for Vista Energy’s 2026 earnings has been revised upward by 1% to $13.69 per share in the past seven days. VIST has a VGM Score of B.
Orion is a specialty construction firm serving infrastructure, industrial and building markets across North America and the Caribbean. The company's operating segment consists of the heavy civil marine construction segment and the commercial concrete segment.
The Zacks Consensus Estimate for 2026 has risen to 37 cents from 36 cents per share over the past 90 days. Earnings for 2026 are expected to grow 48% from a year ago. ORN currently has a VGM Score of B.
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Orion Group Holdings, Inc. (ORN): Free Stock Analysis Report
Vista Energy, S.A.B. de C.V. - Sponsored ADR (VIST): Free Stock Analysis Report
StoneX Group Inc. (SNEX): Free Stock Analysis Report
BrightSpring Health Services, Inc. (BTSG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).