by Zach | February 5, 2014 12:35 pm
With earnings season in full swing, it’s time for me to pull out my ‘First Profit’ stock screen. The concept for this one is to find companies that have just recently shown their first quarterly profit within the last year.
The idea is to find companies that have not shown a profit for at least the previous 4 quarters, but have just recently produced their first profit this last quarter.
I run this screen after every earnings season. And here we are again. Some of these companies will be relatively new, and this recent profit may be the only profit in the company’s history so far.
Other companies may have a long history of profitability, but for whatever reason haven’t seen a profit in a while — but has finally returned to profitability.
I like this concept because, if the trend has been one of improvement, there’s a good chance the trend will continue. This is true whether you’ve been profitable or are just getting profitable.
But some people (like myself for example) dislike buying companies that cannot show a profit. And there are many others who won’t even consider a stock unless it’s making money.
Losing less than the previous quarter is indeed an improvement. And in that respect, by definition, it is growth, i.e., they’re growing less unprofitable. And it’s even better if the losses are less and less in each sequential quarter.
But there’s something entirely different about growth AND being profitable. And those are the stocks that will likely see the best new demand from new investors; people who are now, all of a sudden, willing to take notice of, and pay attention to, the stock.
And that’s what we’re screening for today:
The screen is pretty simple yet pretty powerful.
Here are 5 stocks that made it thru this week’s screen:
Get the rest of the stocks on this list and start looking for the newest companies that fit this criteria. It’s easy to do. And it could help you find your next ‘best’ stock. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here for your 2 week free trial to the Research Wizard.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: http://www.zacks.com/performance.
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