With earnings season having just begun, now is a great time to take a look at my ‘First Profit’ stock screen. The concept for this one is to identify companies that have recently shown their first quarterly profit within the last year.
More specifically, 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:
COG Cabot Oil Gas
CSII Cardiovascular Systems
FTAI Fortress Transportation and Infrastructure
GHDX Genomic Health
PARR Par Pacific Holdings
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.
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