Crunching profit numbers and evaluating surprises might be the preferred methods for scooping up big gains in the impending first-quarter earnings season. However, looking beyond profits and assessing a company’s cash position can be far more rewarding because these indicate its true financial health.
In this regard, stocks like BrightSpring Health Services, Inc. BTSG, Aura Minerals Inc. AUGO, Constellium SE CSTM and Cimpress plc CMPR emerge as compelling picks, supported by improving cash flow trends.
This is because although profit is a company’s goal, cash is the lifeblood of its existence, development and success, and indeed a measure of its resilience. Even a profitable business can fail if its cash flow is uneven and eventually file for bankruptcy. Nevertheless, a company with a healthy cash position has the capability to effectively tide over any market mayhem and still be on its growth curve, alongside enjoying the flexibility to make decisions, chase potential investments and run its growth engine.
With uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from 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 seven 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 15% over the past 60 days. BTSG has a VGM Score of B.
Aura Minerals is a company focused on the development and operation of gold and base metal projects principally in the Americas. AUGO operating assets include the Minosa gold mine in Honduras, the Almas, Apoena, Borborema and MSG gold mines in Brazil, as well as the Aranzazu copper, gold and silver mine in Mexico.
The Zacks Consensus Estimate for Aura Minerals’ 2026 earnings has moved northward to $11.86 from $7.98 per share over the past 60 days. AUGO has a VGM Score of B.
Constellium develops innovative, value-added aluminum products for aerospace, automotive and packaging markets and applications.
The Zacks Consensus Estimate for Constellium’s 2026 earnings has been revised upward by 1% to $2.07 per share over the past seven days. CSTM has a VGM Score of A.
Cimpress plc is an online supplier of high-quality graphic design services and customized printed products to small businesses and consumers. CMPR’s product offerings include business cards, brochures and websites, e-commerce platforms, calendars, address labels, note pads and signage, among others.
The Zacks Consensus Estimate for fiscal 2026 earnings has improved 2.7% over the past 60 days to $3.41. CMPR currently has a VGM Score of B.
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Constellium SE (CSTM): Free Stock Analysis Report
Cimpress plc (CMPR): Free Stock Analysis Report
BrightSpring Health Services, Inc. (BTSG): Free Stock Analysis Report
Aura Minerals Inc. (AUGO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).