A Company's First Profit Can Mean Big Gains for Investors - Screen of the Week
August 13 2012 - 8:00PM
Zacks
With earnings season winding down, I've been running screens with
the concept 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.)
![](http://www.zacks.com/images/upload_dir/1330450784.jpg)
The screen is pretty simple yet pretty powerful.
Here are 5 stocks that made it thru this week's screen:
AGYS Agilysys Inc.
ALKS Alkermes plc
CVTI Covenant Transportation Group, Inc.
ISLE Isle of Capri Casinos, Inc.
LPX Louisiana-Pacific Corp.
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.
Learn how today.
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.
AGILYSYS INC (AGYS): Free Stock Analysis Report
AGILYSYS INC (AGYS): Free Stock Analysis Report
ALKERMES INC (ALKS): Free Stock Analysis Report
ALKERMES INC (ALKS): Free Stock Analysis Report
COVENANT TRANS (CVTI): Free Stock Analysis Report
COVENANT TRANS (CVTI): Free Stock Analysis Report
ISLE OF CAPRI (ISLE): Free Stock Analysis Report
ISLE OF CAPRI (ISLE): Free Stock Analysis Report
LOUISIANA PAC (LPX): Free Stock Analysis Report
LOUISIANA PAC (LPX): Free Stock Analysis Report
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