Chicago, IL – October 13, 2009- Kevin Matras screens for companies showing their ‘first’ profit and explains why they are the ones to watch this earnings season. Highlighted stocks in this week’s article include Dollar Thrifty Automotive Group, Inc. (NYSE: DTG), Global Crossing Ltd. (NASDAQ: GLBC), Legg Mason, Inc. (NYSE: LM), Local.com Corp. (NASDAQ: LOCM) and IMAX Corp. (NASDAQ: IMAX). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=5528.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
As third quarter earnings season gets underway, I’ve been running a screen with an interesting concept: to find companies that have just recently shown their first quarterly profit within the last year.
Since earnings season has just begun, the last quarter for most of these companies will have ended 6/2009. Although, there will be some that have already reported for 9/09.
Nonetheless, the idea is to find companies that have just recently produced their first profit after having not shown a profit for at least the previous 4 quarters.
Some of these companies will be relatively new, and this recent profit may be the only profit in its history – so far.
For others, they may have a long history of profitability, but have seen a contraction over the last year as the recession raged on. However, they have finally returned to profitability.
I like this concept because if the trend has been one of improvement, there’s a good chance that the 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. 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. In that respect, by definition, it is growth, i.e., they’re growing less unprofitable. It’s even better if the losses are less and less in each sequential quarter.
But there’s something entirely different about growth AND profitability. 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 > 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.) - Current Price >= 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 10/13/09):
DTG Dollar Thrifty Automotive Group, Inc. (reports 11/4/09)
GLBC Global Crossing Ltd. (reports 10/28/09)
LM Legg Mason, Inc. (reports 10/22/09)
LOCM Local.com Corp. (reports 11/5/09)
IMAX IMAX Corp. (reports 11/5/09)
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 could help you find your next ‘best’ stock. Start screening for these companies today with a free trial to the Research Wizard: http://at.zacks.com/?id=5529.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the “#1 site for screening stocks” by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=5530.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=5531.
Follow us on Twitter: http://twitter.com/ZacksInvestment.
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: www.Zacks.com
