CHICAGO, Feb. 16, 2011 /PRNewswire/ -- Stocks in this
week's article include: KB Home (NYSE: KBH), Nordion
Inc. (NYSE: NDZ), Pike Electric Corp. (NYSE: PIKE),
Regions Financial Corp. (NYSE: RF) and Wabash National
Corp. (NYSE: WNC). Kevin Matras
screens for companies showing their 'first' profit and explains why
these are ones to watch.
(Logo:
http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Screen of the Week written by Kevin
Matras of Zacks Investment Research:
With fourth quarter earnings winding down, I've been running
screens with the concept of finding 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.
Some of these companies will be relatively new, so this recent
profit may be the only profit in the company's history so far.
Others may have a long history of profitability, but haven't seen a
profit in a while for whatever reason -- but have finally returned
to profitability.
I like this concept because if the trend has been one of
improvement, there's a good chance that trend will continue. This
is true whether you've been profitable or are just
getting profitable.
But some (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...
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