With earnings season once again upon us, 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:
EPS 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 thru the screen.)
BTW – for those who have the Research Wizard and want to build this on their own – here’s what the screen looks like. You don’t have to use the calculation expression feature either. It can all be done from the main page. (See below.)
The screen is pretty simple yet pretty powerful.
Here are 5 stocks that made it thru this week’s screen (for 1/15/13):
1. Exterran Holdings, Inc. (EXH, Earnings, Analysts, Financials): Provides operations, maintenance, service, and equipment for oil and natural gas industry. Market cap at $1.49B, most recent closing price at $23.02. Click to view Zacks' Free Snapshot Report
2. The St. Joe Company (JOE, Earnings, Analysts, Financials): Operates as a real estate development company in Florida. Market cap at $2.17B, most recent closing price at $23.54. Click to view Zacks' Free Analyst Report
3. Lawson Products Inc. (LAWS, Earnings, Analysts, Financials): Distributes products and services to the industrial, commercial, institutional, and governmental maintenance, repair, and operations marketplace in the United States and Canada. Market cap at $103.29M, most recent closing price at $12.01. Click to view Zacks' Free Snapshot Report
4. Pandora Media, Inc. (P, Earnings, Analysts, Financials): Operates as an Internet radio company in the United States. Market cap at $1.84B, most recent closing price at $10.80. Click to view Zacks' Free Snapshot Report
5. Vulcan Materials Company (VMC, Earnings, Analysts, Financials): Engages in the production and sale of construction aggregates for the infrastructure industry primarily in the United States. Market cap at $7.05B, most recent closing price at $54.37. Click to view Zacks' Free Analyst Report
Get the rest of the stocks on this list and start looking for the newest companies that fit these 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.
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.
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Exterran Holdings, Inc. (EXH, Chart, Download SEC Filings)
- The St. Joe Company (JOE, Chart, Download SEC Filings)
- Lawson Products Inc. (LAWS, Chart, Download SEC Filings)
- Pandora Media, Inc. (P, Chart, Download SEC Filings)
- Vulcan Materials Company (VMC, Chart, Download SEC Filings)
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