With earnings season set to begin next week, now is a great time to take a look at my “First Profit” stock screen. The concept for “First Profit” is to find companies that have recently shown their first quarterly profits within the last year.
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 the “First Profit” concept because if the trend has been one of improvement, there’s a good chance the trend will continue, which is true whether the company has been profitable or are just getting profitable.
Ideally, we want stocks that are both growing and profitable, and that’s what we’re screening for today:
“First Profit” Parameters
- Earnings-per-share for the previous 4 quarters less than or equal to 0 (This means in each of the previous 4 quarters — except the most recently reported quarter — the company has reported earnings of less than or equal to zero, i.e., no profit.
- EPS for the recently reported quarter greater than 0 (This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
- Current price greater than or equal to 5 (I prefer to only look at companies over $5. But if you drop this item from the screen, it’ll currently produce three times as many stocks coming through the screen.)
The screen is pretty simple yet pretty powerful.
“First Profit” Results
Here are five stocks that made it through this week’s screen:
Enanta Pharmaceuticals (ENTA)
GTT Communications (GTT)
FreightCar America (RAIL)
Zeltiq Aesthetics (ZLTQ)
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