Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on China Lodging Group (Nasdaq: HTHT ) , whose recent revenue and earnings are plotted below.
Top 5 Tech Stocks To Buy Right Now: Synutra International Inc.(SYUT)
Synutra International, Inc., through its subsidiaries, engages in the production, marketing, and distribution of dairy based nutritional products primarily in the People?s Republic of China. The company offers powdered infant and adult formula products for adults and children under the Super, U-Smart, My Angel, Mingshan, and Helanruniu brand names; prepared baby food for babies and children under the Huiliduo brand name; and nutritional ingredients and supplements, such as chondroitin sulfate, microencapsulated Docosahexanoic Acid, and Arachidonic Acid. It also sells milk powder, whey protein, and raw milk to industrial customers. The company markets its products under Shengyuan or Synutra brands. It sells its products through sales and distribution network covering 30 provinces and provincial-level municipalities in China. Synutra International, Inc. is headquartered in Rockville, Maryland.
Advisors' Opinion:- [By Seth Jayson]
Synutra International (Nasdaq: SYUT ) is expected to report Q4 earnings on June 13. Here's what Wall Street wants to see:
The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Synutra International's revenues will contract -9.1% and EPS will decrease -84.6%.
Hot Income Stocks To Buy Right Now: NET Servicos de Comunicacao S.A.(NETC)
Net Servicos de Comunicacao S.A., through its subsidiaries, provides cable television, Internet access, and voice services in Brazil. It offers cable television services under the ?NET? brand name through various cable networks located in the largest cities of Brazil. The company also offers broadband Internet access services under the ?NET VIRTUA? brand name by using Embratel's IP backbone infrastructure. In addition, it provides voice services under the ?NET FONE VIA EMBRATEL? brand name jointly with Embratel. Further, the company offers integrated video, broadband, and voice services. Net Servicos de Comunicacao S.A. was founded in 1994 and is headquartered in Sao Paulo, Brazil.
Advisors' Opinion:- [By Vanina Egea] offers bundled services and has aggressively expanded its Internet and TV subscriber base in the state.
Investing for Long-term Growth
Looking forward, Telef贸nica Brasil is investing in technology and network expansion to further empower its competitive position. The firm is expanding its 3G network based on CDMA EV-DO and HSPA technologies, which provide a great advantage over its peers. Further, it expects to benefit from the growth opportunities in the 4G market. Consequently, it has signed a deal with Ceragon Networks Ltd. (CRNT) to deploy the superfast 4G network nationwide.
A Valuable Stock
Telef贸nica Brasil has a healthy balance sheet with strong cash flow generation (up to 9,576 million in 2013 from 3,488 million in 2011) and reasonable debt levels. Its net debt-to-EBITDA ratio is of 0.17 times and it has a debt- to-equity ratio of 0.2 against its peers��average of 0.9. Its financial strength and a robust dividend have attracted investment gurus like Charles Brandes (Trades, Portfolio) and David Dreman (Trades, Portfolio), who have recently incorporated the company to its portfolio.
Considering the stock�� trading price of 14.6x its trailing earnings compared to the peer group average of 16.90x, and a compelling dividend yield of 7.30 with a payout ratio of 1.1 (against its competitors��median of 3.53 and 0.62, respectively), I believe this stock is a worthy investment opportunity with excellent growth potential.
Disclosure: Vanina Egea holds no position in any stocks mentioned.
Also check out: Charles Brandes Undervalued Stocks Charles Brandes Top Growth Companies Charles Brandes High Yield stocks, and Stocks that Charles Brandes keeps buyingAbout the author:Vanina EgeaA fundamental analyst at Lone Tree AnalyticsVisit Vanina Egea's Website
Currently 5.00/512345Rating: 5.0/5 (1 vote)
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Hot Income Stocks To Buy Right Now: RF Micro Devices Inc.(RFMD)
RF Micro Devices, Inc. designs, develops, manufactures, and markets radio frequency (RF) components and compound semiconductor technologies in the United States and internationally. Its products enable mobility, as well as provide connectivity and support functionality in the cellular handsets, wireless infrastructure, wireless local area networks, cable television /broadband, Smart Energy/advanced metering infrastructure, and aerospace and defense markets. The company offers products that range from single-function components to highly integrated circuits and multi-chip modules (MCMs). Its integrated circuit products include gain blocks, low noise amplifiers, power amplifiers (PAs), receivers, transmitters, transceivers, modulators, demodulators, attenuators, switches, frequency synthesizers, and voltage-controlled oscillators (VCOs); MCM products consist of PA modules, switch-filter modules, active antenna products, VCOs, phase-locked loops, coaxial resonator oscillators , active mixers, variable gain amplifiers, hybrid amplifiers, power doublers, and optical receivers; and passive components consist of splitters, couplers, mixers, and transformers, as well as isolators and circulators. The company markets its products to original equipment manufacturers and original design manufacturers. RF Micro Devices, Inc. was founded in 1991 and is headquartered in Greensboro, North Carolina.
Advisors' Opinion:- [By Selena Maranjian]
Finally, Soros's biggest closed positions included JPMorgan Chase�and General Electric. Other closed positions of interest include RF Micro Devices (NASDAQ: RFMD ) , which specializes in high-performance radio-frequency technology. The company received an analyst upgrade in March, due to its successful diversification away from Nokia�and its profitable growing presence in Samsung and Apple�devices. Since then, the stock has hit a 52-week high, and some are hoping that it will do a lot of business in China. Its recently reported fourth quarter featured revenue up 49%�over year-ago levels, but its free cash flow has been falling, while net income has also shrunk.
- [By kcpl]
Apple (AAPL) supplier TriQuint Semiconductor (TQNT) has been zooming this year with the stock up almost 60%. TriQuint�� share price received a boost after it announced a merger with RF Micro Devices (RFMD). Now, TriQuint is expected to release its first-quarter earnings report in April 23. Let�� take a look at what�� expected of the company and if it can sound out a good outlook.
- [By jaggom]
RF Micro Devices��(RFMD) recent declaration that it intends to team up with its fellow chip maker TriQuint Semiconductor has given a big push to its stock. Due to its cost synergies and market share gains, RF Micro should continue getting better.
Hot Income Stocks To Buy Right Now: Power Integrations Inc.(POWI)
Power Integrations, Inc. designs, develops, manufactures, and markets proprietary, high-voltage, analog, and mixed-signal integrated circuits (ICs) in the United States and internationally. The company offers alternating current to direct current power conversion products, including TOPSwitch, TinySwitch, and LinkSwitch that addresses power supplies ranging from less than 1 watt of output up to approximately 50 watts of output. These products are used in mobile-device chargers, consumer appliances, utility meters, liquid crystal display monitors, standby power supplies for desktop computers and televisions, and other consumer and industrial applications. It also provides various products for use in applications up to approximately 500 watts of output, such as Hiper family power-conversion and power-factor-correction products for high-power applications, including main power supplies for desktop computers, televisions, and game consoles, as well as light emitting diode stre et lights; CapZero and SenZero, which are designed to enhance the energy-efficiency of power supplies and reduce standby consumption by eliminating particular sources of power waste within a power supply; and high-voltage diodes comprising Qspeed diodes. In addition, the company offers high-voltage DC-DC products comprising The DPA-Switch family of products that are monolithic high-voltage power conversion ICs for use in power-over-Ethernet powered devices, such as voice-over-Internet protocol phones and security cameras, as well as network hubs, line cards, servers, digital PBX phones, DC-DC converter modules, and industrial controls. It serves communications, consumer, computer, and industrial electronics markets. The company sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales staff and a network of independent sales representatives and distributors. Power Integrations, Inc. was founded in 1988 and is based in San Jose, California.
Advisors' Opinion:- [By Roberto Pedone]
Power Integrations (POWI) designs, develops, manufactures and markets proprietary, high-voltage, analog integrated circuits for use in AC-DC and DC-DC power conversion in the consumer, communications, computer and industrial electronics markets. This stock closed up 5.9% at $55.15 in Wednesday's trading session.
Wednesday's Volume: 571,000
Three-Month Average Volume: 218,547
Volume % Change: 173%From a technical perspective, POWI ripped higher here right above some near-term support at $50.68 with above-average volume. This move also pushed shares of POWI into breakout and new 52-week-high territory, since the stock took out some near-term overhead resistance at $55.38. At last check, POWI closed a bit off its intraday high and volume was well above its three-month average action of 218,547 shares.
Traders should now look for long-biased trades in POWI as long as it's trending above Wednesday's low of $52.60 and then once it sustains a move or close above Wednesday's high of $55.59 with volume that this near or above 218,547 shares. If we see that move soon, then POWI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $60 to $62.
Hot Income Stocks To Buy Right Now: ITT Industries Inc.(ITT)
ITT Corporation designs, manufactures, and sells a range of engineered products, and provides related services worldwide. Its Defense & Information Solutions segment develops tactical communications equipment, electronic warfare and force protection equipment, radar systems, integrated structures equipment, and imaging and sensor equipment, including night vision goggles, as well as weather, location, surveillance, and other related technologies for military and government agencies. It also provides services comprising air traffic management, information and cyber solutions, large-scale systems engineering, and integration and defense technologies; satellite-based imaging payloads for intelligence, surveillance, and reconnaissance solutions; and high-resolution commercial imaging systems with earth and space science applications, climate and environmental monitoring sensors and systems, and GPS navigation and software applications designed for image and data processing and dissemination. The company?s Fluid Technology segment provides water transport and wastewater treatment systems, pumps and related technologies, and other water and fluid control products with municipal, residential, commercial, and industrial applications. Its Motion & Flow Control segment manufactures shock absorbers and brake friction materials for the transportation industry; switch applications for the industrial and aerospace industries; electrical connectors used in telecommunications, computers, aerospace, medical, and industrial applications; and a range of pumps and tailored products for marine, food and beverage, and general industrial markets. The company was formerly known as ITT Industries, Inc. and changed its name to ITT Corporation in July 2006. ITT Corporation was founded in 1920 and is based in White Plains, New York.
Advisors' Opinion:- [By MONEYMORNING]
This 85-year-old forest products company operates as a Real Estate Investment Trust (REIT) after being first acquired, then later spun off, by ITT Corp. (NYSE: ITT).
- [By Aaron Levitt]
Spun-off from industrial giant ITT (ITT) a few years ago, Xylem (XYL) could be a great starting point for investors looking at water stocks. Aside from its cool and appropriate name, XYL provides host of equipment — pumps, controllers and filtration devices — for wastewater treatment plants across the globe.
- [By Jeremy Bowman]
What: Shares of ITT Educational Services (NYSE: ITT ) were flying higher today, gaining as much 34% after smashing analyst estimates in its quarterly report.
Hot Income Stocks To Buy Right Now: Internet Initiative Japan Inc.(IIJI)
Internet Initiative Japan Inc., together with its subsidiaries, provides Internet connectivity, WAN, outsourcing, and systems integration services to customers primarily in Japan. Its Internet connectivity services include services for corporate use, such as IP services and data center connectivity services, broadband Internet connectivity services, dial-up access services, IIJ mobile services, and IIJ ISDN/F and IIJ line management/F services; and connectivity services for home use consisting of IIJ4U, IIJmio, and hi-ho. The company?s outsourcing services comprise security-related outsourcing services that protect customer network systems from unauthorized access and secure remote connections to internal networks; network-related outsourcing services, such as Internet-virtual private network, and router rental; server-related outsourcing services, including Web hosting, e-mail hosting, document storage, and streaming; data center-related outsourcing services consisting o f data center facility, and management and monitoring; and customer support and help desk solutions, and IP phone services. It also provides systems integration services, which include consulting, project planning, systems design, and development of network systems, primarily focusing on Internet business systems, and Intranet and Extranet corporate information systems; and systems operation and maintenance services. In addition, the company sells network-related equipment, as well as provides automated teller machine (ATM) services. As of June 30, 2011, it operated 9 points of presence (POPs) for dedicated access and 1 POP for nationwide dial-up access. The company also operates approximately 280 ATMs and 16 Internet data centers. Internet Initiative Japan Inc. was founded in 1992 and is headquartered in Tokyo, Japan.
Advisors' Opinion:- [By Jake L'Ecuyer]
Leading and Lagging Sectors
Thursday morning, the telecommunications services sector proved to be a source of strength for the market. Leading the sector was strength from ARC Group Worldwide (NASDAQ: ARCW) and Internet Initiative Japan (NASDAQ: IIJI). In trading on Thursday, non-cyclical consumer goods & services shares were relative laggards, down on the day by about 0.43 percent.
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