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 Echo Global Logistics (Nasdaq: ECHO ) , whose recent revenue and earnings are plotted below.
Top High Dividend Companies To Own For 2015: Actelion Ltd (ATLN.VX)
Actelion Ltd is a Swiss biopharmaceutical holding company that focuses on the discovery, development and commercialization of small molecule drugs. The Company has four approved drugs on the market: Tracleer, an oral dual endothelin receptor antagonist; Veletri, a prostanoid vasodilator; Ventavis, an inhaled formulation of iloprost, and Zavesca, an oral treatment for type 1 Gaucher disease. Furthermore, the Company has a number of compounds various stages of development. The Company operates through a number of worldwide subsidiaries, including Actelion Registration Ltd, which holds marketing authorizations for products marketed in the European Union; Actelion Clinical Research, Inc, engaged in clinical development on behalf of the Company's group; Actelion Re SA, providing insurance solutions for the Company's group and Actelion US Holding Company, engaged in the holding activities of the Company's United States-based units. In September 2013, it acquired Ceptaris Therapeutics, Inc. Advisors' Opinion:- [By Victor Selva]
Forest Laboratories has a current ratio of 2.69% which is higher than the ones registered by Endo International Plc (ENDP), Valeant Pharmaceuticals International (VRX) and Cubist Pharmaceuticals Inc. (CBST). For investors looking for a higher ROE, Allergan Inc. (AGN) and Actelion Ltd. (ATLN.VX) are good options.
Hot Logistics Stocks To Buy For 2014: Sovereign Lithium Inc (SLCO)
Sovereign Lithium, Inc., formerly Great American Energy Inc., incorporated on February 22, 2007, is a mineral exploration and development company focused on supporting clean energy and clean technology industries. The Company is engaged in identifying, acquiring and developing mineral assets in the United States and surrounding countries. The Company�� portfolio of projects primarily targets lithium production with a sub-focus on rare earth elements (REE).
The Company�� project includes Big Smoky Valley lithium project and Bear Creek REE project. Big Smoky Valley lithium project is located in Esmeralda Country in Nevada. It represents 48 unpatented placer mining claims consisting of 7,680 acres (3,108 hectares) in and around Esmeralda Country, Nevada. Bear Creek REE project consists of 10 mining claims totaling 7,311 acres (2,959 hectares) in British Columbia, Canada.
Advisors' Opinion:- [By John Udovich]
Small cap OTC stocks Sovereign Lithium Inc (OTCMKTS: SLCO), Life Stem Genetics Inc (OTCMKTS: LIFS), Nevada Gold Corp (OTCMKTS: NVGC), Guar Global Ltd (OTCMKTS: GGBL) and Makism 3D Corp (OTCMKTS: MDDD) all saw their trading halted late last year by the SEC, but now all of these stocks are trading again. So what's going on and why the sudden crackdown? First, here is a quick look at what happened to the following five small cap stocks:
- [By James E. Brumley]
Well, as it turns out, the snake that bit L&L Energy, Inc. (NASDAQ:LLEN) and Sovereign Lithium Inc. (OTCMKTS:SLCO) didn't end up biting Makism 3D Corp. (OTCMKTS:MDDD). And in retrospect, that's probably how it should be. Indeed, the fact that MDDD didn't even come close to suffering the same fate as SLCO or LLEN did may be the biggest assurance Makism 3D fans could hope for that the company is everything it says it is.
Hot Logistics Stocks To Buy For 2014: Terex Corporation(TEX)
Terex Corporation manufactures capital goods machinery products worldwide. Its Aerial Work Platforms segment offers portable material lifts, portable aerial work platforms, trailer-mounted articulating booms and light towers, self-propelled articulating and telescopic booms, scissor lifts, telehandlers, and bridge inspection and utility equipment under the Terex and Genie brands. The company?s Construction segment provides off-highway trucks and material handlers; loader backhoes, compaction equipment, mini and midi excavators, site dumpers, compact track loaders, skid steer loaders, wheel loaders, and tunneling equipment; and asphalt and concrete equipment, and landfill compactors principally under the Terex name. Its Cranes segment offers mobile telescopic and tower cranes, lattice boom crawler and truck cranes, and truck-mounted cranes; and straddle and sprinter carriers, gantry cranes, ship-to-shore cranes, reach stackers, empty and full container handlers, and genera l cargo lift trucks under the Terex brand. The company?s Material Handling and Port Solutions segment provides standard and process cranes, rope and chain hoists, electric motors, and light crane systems; and crane components and port equipment, such as mobile harbor and automated stacking cranes, and automated guided vehicles, as well as terminal automation technology, including software under the Demag and Gottwald names. Its Materials Processing segment offers crushers, washing systems, screens, apron feeders, chippers, and related components and replacement parts under the Terex and Powerscreen brands. The company provides financing solutions to assist customers in the rental, leasing, and acquisition of its products. It serves construction, infrastructure, quarrying, mining, manufacturing, shipping, transportation, refining, energy, and utility industries through dealers, rental companies, direct sales, and major accounts. The company was founded in 1925 and is based i n Westport, Connecticut.
Advisors' Opinion:- [By Ben Levisohn]
Given Fisher’s mixed message, it shouldn’t come s a surprise that Caterpillar is little changed today at $90.52, even as Terex (TEX) has fallen 0.8% to $41.03 and Joy Global (JOY) has dropped 1.1% to $55.19. Deere has (DE) gained 0.4% to $90.10.
Hot Logistics Stocks To Buy For 2014: Barrick Gold Corporation (ABX)
Barrick Gold Corporation engages in the production and sale of gold, as well as related activities, such as exploration and mine development. The company has a portfolio of 25 operating mines and a pipeline of projects located in North America, South America, the Australia Pacific region, and Africa. It also produces copper and holds interests in oil and gas properties located in Canada. The company was founded in 1983 and is based in Toronto, Canada.
Advisors' Opinion:- [By Chad Tracy]
The five largest holdings in the GDX fund make up 45% of the total portfolio. They are Goldcorp (NYSE: GG), Barrick Gold (NYSE: ABX), Newmont Mining (NYSE: NEM), Silver Wheaton (NYSE: SLW), and Randgold Resources (Nasdaq: GOLD).
- [By Steve Symington]
To be sure, take a look at how prominent miners such as Barrick Gold (NYSE: ABX ) and Yamana Gold (NYSE: AUY ) have performed relative to the S&P 500 since then:
Hot Logistics Stocks To Buy For 2014: Intersil Corporation(ISIL)
Intersil Corporation designs, develops, manufactures, and markets analog and mixed-signal integrated circuits for applications in the industrial, computing, consumer, and communications electronics markets. The company?s industrial products include operational amplifiers, bridge drivers, isolated and non-isolated power management products, switches and multiplexers, video decoders, and other standard analog and power management products used in medical imaging, energy management, automotive, military, instrumentation, security surveillance, and factory automation markets. Its computing products comprise desktop, server, notebook, and network attached storage power management products, including core power devices and other power management products for peripheral devices, as well as lithium ion battery chargers. The company?s consumer products consist of handheld, display, gaming, light sensor, and class-D audio amplifier products for use in smartphones, LCD televisions, tablet computers, electronic game systems, set top boxes, MP3 players, GPS systems, AV receivers, and home audio systems. Its communication products include line drivers, isolated and non-isolated power management, radiation-hardened products, digital power management products, broadband and hot plug power management products, and high-speed data converters for applications in DSL, home gateway, satellite, networking, cellular base station, and networking/switching equipment markets. The company markets its products through distributors and value added resellers to original equipment manufacturers, original design manufacturers, and contract manufacturers in China, the United States, South Korea, Taiwan, Japan, Germany, Singapore, and Mexico. Intersil Corporation was founded in 1999 and is headquartered in Milpitas, California.
Advisors' Opinion:- [By Seth Jayson]
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Intersil (Nasdaq: ISIL ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Intersil doing by this quick checkup? At first glance, pretty well. Trailing-12-month revenue decreased 18.7%, and inventory decreased 19.5%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue shrank 15.6%, and inventory shrank 19.5%. Over the sequential quarterly period, the trend looks OK but not great. Revenue dropped 4.2%, and inventory dropped 3.1%. - [By Jake L'Ecuyer]
Intersil (NASDAQ: ISIL) tumbled 4.81 percent to $10.92 after Evercore Partners downgraded the stock from Equal-Weight to Underweight.
Texas Industries (NYSE: TXI) was down, falling 4.36 percent to $65.78 after Longbow Research downgraded the stock from buy to neutral.
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