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 CECO Environmental (Nasdaq: CECE ) , whose recent revenue and earnings are plotted below.
Hot Media Stocks To Own For 2015: Quiksilver Inc.(ZQK)
Quiksilver, Inc. designs, develops, produces, and distributes apparel, footwear, accessories, and related products. The company offers shirts, walkshorts, T-shirts, fleece, pants, jackets, snowboard wear, footwear, hats, backpacks, wetsuits, watches, eyewear, and other accessories to men, women, boys, girls, toddlers, and infants under the brand Quiksilver. It also provides sportswear, swimwear, footwear, backpacks, snowboard wear, snowboards, bedroom furnishings, and other accessories for girls, toddlers, and infants under the brand Roxy. In addition, the company offers skateboard shoes, snowboard boots, sandals, and apparel for young men and juniors under the brand DC. Further, it provides skateboard products, and snowboards and accessories under the brands Hawk, Lib Technologies, and Gnu. The company sells its products in approximately 90 countries in the Americas, Europe, and the Asia/Pacific, through surf shops, skateboard shops, snowboard shops, select department sto res, independent specialty or active lifestyle stores, and specialty chains, as well as through its 770 owned or licensed company stores. Quiksilver, Inc. was founded in 1976 and is headquartered in Huntington Beach, California.
Advisors' Opinion:- [By Maria Armental var popups = dojo.query(".socialByline .popC"); popups.forEach]
Quiksilver Inc.(ZQK) said its fiscal second-quarter loss widened as the sport outfitter’s sales declined across its brands. Shares dropped 41% to $3.42 premarket.
- [By Ben Levisohn]
Stocks ticked lower today despite economic data that would seem to have one foot solidly in the bullish camp. Quiksilver (ZQK), Verizon Communications (VZ), Wynn Resorts (WYNN) and E*Trade Financial (ETFC) fell.
- [By John Kell and Lauren Pollock var popups = dojo.query(".socialByline .popC"); ]
Quiksilver Inc.(ZQK) said its revenue dropped more than expected in its fiscal first quarter, with the declines spanning its geographic markets, partly owing to negative currency impacts.
10 Best Stocks To Own Right Now: bluebird bio Inc (BLUE)
bluebird bio, Inc., incorporated on April 16, 1992, is a clinical-stage biotechnology company, the Company is focused on transforming the lives of patients with severe genetic and orphan diseases using gene therapy. Gene therapy seeks to introduce a functional copy of the defective gene into a patient�� own cells, a process called gene transfer. Through gene transfer, a functional copy of the mutated gene is delivered to the patient�� cells, thereby correcting the underlying genetic defect that causes aberrant gene expression. As of December 31, 2012, the Company is conducting a Phase I/II clinical study in France evaluating an earlier generation of its LentiGlobin vector for the treatment of �-thalassemia major and SCD. Initial proof-of-concept data from this study were published in Nature. During the year ended December 31, 2013, the Company plans to initiate an extension of this study under a revised protocol for LentiGlobin, which the Company refers to as the HGB-205 Study. The Company also plans o initiate a second Phase I/II clinical program in the United States for LentiGlobin, which the Company refers to as the HGB-204 Study, for �-thalassemia major. In March 2013, the Company entered into a strategic collaboration with Celgene Corporation, or Celgene, to discover, develop and commercialize, disease-altering gene therapies in oncology.
Its gene therapy platform is based on viral vectors that utilize a modified, non-replicating version of the Human Immunodeficiency Virus Type 1 (HIV-1) virus, that has been stripped of all of the components required for it to self-replicate and infect additional cells. The HIV-1 virus is part of the lentivirus family of viruses, as a result of which the Company refer to its vectors as lentiviral vectors. Its lentiviral vectors are used to introduce a functional copy of a gene to the patient�� own isolated blood stem cells, called hematopoietic stem cells (HSCs), which reside in a patient�� bone marrow and are capable of differentiating int! o a wide range of cell types. HSCs are dividing cells, thus its approach allows for sustained expression of the modified gene as the Company is able to take advantage of a lifetime of replication of the gene-modified HSCs. Additionally, the Company has developed a cell-based vector manufacturing process that is both reproducible and scalable.
Adrenoleukodystrophy
Adrenoleukodystrophy is a rare X-linked, inherited, neurological disorder that is often fatal. ALD is caused by mutations in the ABCD1 gene which encodes for a protein called the ALD protein (ALDP), which plays a critical role in the breakdown and metabolism of long-chain fatty acids (VLCFA). Without functional ALDP, VLCFA accumulate in cells including neural cells in which they cause damage to the myelin sheath, a protective and insulating membrane that surrounds nerve cells in the brain. This damage can result in decreased motor coordination and function, visual and hearing disturbances, the loss of cognitive function, dementia, seizures, adrenal dysfunction and other complications, including death. ALD is divided into various sub-segments with three main phenotypes that impact brain function: CCALD (Childhood cerebral adrenoleukodystrophy, AMN (Adrenomyeloneuropathy) and ACALD (Adult Cerebral ALD).
�-thalassemia
�-thalassemia is a rare hereditary blood disorder caused by a genetic abnormality of the �-globin gene resulting in defective red blood cells (RBCs). Genetic mutations cause the absence or reduced production of the beta chains of hemoglobin, or �-globin, thereby preventing the proper formation of hemoglobin A, which normally accounts for greater than 95% of the hemoglobin in the blood of adults. Hemoglobin is an iron-containing protein in the blood that carries oxygen from the respiratory organs to the rest of the body. Hemoglobin A consists of four chains-two chains each of a-globin and �-globin. Normally existing at an approximate 1:1 ratio, genetic mutations that impair t! he produc! tion of �-globin can lead to a relative excess of a-globin, premature death of red blood cells. The clinical implications of the a-globin/�-globin imbalance are two-fold: first, patients lack sufficient RBCs and hemoglobin to effectively transport oxygen throughout the body and can become severely anemic; and second, the shortened life span and ineffective production of RBCs can lead to other complications such as splenomegaly, marrow expansion, bone deformities, and iron overload in organs.
Sickle cell disease
Sickle cell disease (SCD) is a hereditary blood disorder resulting from a mutation in the �-globin gene that causes polymerization of hemoglobin proteins and abnormal red blood cell function. The disease is characterized by anemia, vaso-occlusive pain crisis (a common complication of SCD in which there is severe pain due to obstructed blood flow in the bones, joints, lungs, liver, spleen, kidney, eye, or central nervous system), infections, stroke, overall poor life and early death in a subset of patients. Under low-oxygen conditions, which are exacerbated by the red blood cell abnormalities, the mutant hemoglobin aggregates causing the RBCs to take on a sickle shape (sickle cells), which causes them to aggregate and obstruct small blood vessels, thereby restricting blood flow to organs resulting in pain, cell death and organ damage. If oxygen levels are restored, the hemoglobin can disaggregate and the RBCs return to their normal shape, but over time, the sickling damages the cell membrane and the cells fail to return to the normal shape even in high-oxygen conditions.
Advisors' Opinion:- [By Jay Silverman]
Some of the biggest leaders in that field, and there have been dozens in fields, if not more this year, such as Bluebird (BLUE) and Stemline Therapeutics (STML) and have all pulled back to significantly lower levels; even below, in Bluebird's case, the price that had actually opened up as an IPO, even though it's above its IPO price.
- [By David Williamson]
In this video, health-care analyst David Williamson takes a look at the tremendous success of the�Bluebird Bio (NASDAQ: BLUE ) �IPO. The company increased the size of its initial public offering, and priced shares at $17 -- above the top end of its range -- but that still couldn't contain investor appetite for this stock. Shares shot up 50% on the opening day of trading, and have remained there.
10 Best Stocks To Own Right Now: Natural Gas(NG)
NovaGold Resources Inc., through its subsidiaries, engages in the exploration and development of mineral properties primarily in North America. The company primarily explores for gold, silver, copper, zinc, and lead ores. It holds interests in the Donlin Creek property covering 81,361 acres and the Ambler property comprising 90,614 acres located in Alaska; and the Galore Creek property comprising 293,838 acres located in northwestern British Columbia, Canada. The company was formerly known as NovaCan Mining Resources (1985) Limited and changed its name to NovaGold Resources Inc. in March 1987. NovaGold Resources Inc. was founded in 1984 and is based in Vancouver, Canada.
Advisors' Opinion:- [By Dan Caplinger]
Moreover, highly speculative miners have also done badly. NovaGold Resources (NYSEMKT: NG ) represented a $130 million investment for Paulson as of March 31, and it has lost more than 55% year-to-date as investors question whether the company will successfully get its Donlin Gold project in Alaska off the ground.
- [By Holly LaFon] ref="http://www.gurufocus.com/StockBuy.php?GuruName=John+Paulson">John Paulson bough 20, 181,818 shares of NovaGold in the first quarter of 2010 at an average of $6 per share; he added 26,200 shares in the third quarter at an average of $9 per share, and 2,746,800 in the fourth quarter at an average of $9 per share. According to GuruFocus Real Time Picks, in February he increased this holding 30.49% and now owns 29,954,818 shares or 10.8% of the company.
NovaGold Resources is a gold and copper company engaged in the exploration and development of mineral properties in Alaska and Western Canada. NovaGold has a market cap of $2.26 billion; its shares were traded at around $7.68 with and P/S ratio of 5622. NovaGold had an annual average earnings growth of 31.1% over the past 10 years.
It is not a surprise that Paulson would increase his gold holdings. He said in his 2011 investor letter that ��y gold fund will top all others.��He added:
- [By Rich Duprey]
The worst performer in the sector was NovaGold Resources (NYSEMKT: NG ) , which fell 13% yesterday as it scrambles to make sense of its Donlin Gold project in Alaska, the biggest known undeveloped gold deposit anywhere. The joint venture with Barrick has essentially been in limbo since NovaGold's partner said last year it no longer made economic sense to pursue it.
- [By Dan Caplinger]
NovaGold Resources (NYSEMKT: NG ) will give investors its quarterly report on Wednesday. But the mining company has already seen its stock plunge in the wake of crashing gold prices, and NovaGold earnings results aren't likely to give investors much good news barring a big surprise.
10 Best Stocks To Own Right Now: LSI Industries Inc.(LYTS)
LSI Industries Inc. provides corporate visual image solutions primarily in the United States, Canada, Australia, and Latin America. It operates in three segments: Lighting, Graphics, and Technology. The Lighting segment manufactures and markets outdoor and indoor lighting, canopy lighting, landscape lighting, light emitting diodes (LED) lighting, light poles, and photometric layouts products, as well as lighting analysis services. The Graphics segment manufactures and sells exterior and interior visual image elements for use in visual image programs. It offers signage and canopy graphics; pump dispenser graphics; building fascia graphics; decals; interior signage and marketing graphics; aisle markers; wall mural graphics; fleet graphics; prototype program graphics; and solid state LED video screens for the sports and advertising markets, as well as installation services for graphics products. The Technology segment designs, produces, and supports light engines and large fo rmat video screens using LED technology; and specialty LED lighting. Additionally, the company offers menu board systems. It serves commercial, industrial, and multi-site retail markets; petroleum/convenience stores; sports and advertising; and entertainment markets. The company sells its products through regional sales managers, independent sales representatives, and distributors. LSI Industries was founded in 1976 and is headquartered in Cincinnati, Ohio.
Advisors' Opinion:- [By Dan Caplinger]
In Daktronics' report, be sure to look at how the company compares to results that industrial-lighting and display competitor LSI Industries (NASDAQ: LYTS ) announced late last month. Even with a 5% gain in revenue for its March quarter, LSI posted a loss, showing the difficulty in producing high-margin business in the industry. For its part, if Daktronics can keep pushing past its operational challenges, it should be in better position to stay profitable both this quarter and well into the future.
10 Best Stocks To Own Right Now: Bharat Heavy Electricals Ltd (BHEL)
Bharat Heavy Electricals Limited (BHEL) is an engineering and manufacturing company. The Company is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a range of products and services for the core sectors of the economy, including power, transmission, industry, transportation, renewable energy, oil and gas and defense. Its segment includes Power and Industry. It is a manufacturer of Power generation equipment, supplying a wide range of products and systems for thermal, nuclear, gas and hydro-based utility and captive power plants. It is also a manufacturer of a range of industrial systems and products. Products and systems supplied by the Company include captive power plants, centrifugal compressors, drive turbines, industrial boilers and auxiliaries, waste heat recovery boilers, gas turbines, pumps, heat exchangers, electrical machines, valves, heavy castings and forgings, electrostatic precipitators and seamless steel tubes. Advisors' Opinion:- [By Harry Suhartono]
Most Indian stocks rose as producers of capital goods and software companies advanced. Bharat Heavy Electricals Ltd. (BHEL) rallied for the fourth day, helping a gauge of machinery producers to its biggest three-day climb in about two months. The rupee fell the most in a week on concern slowing economic growth will make it tougher to attract investment as the U.S. prepares to rein in stimulus.
10 Best Stocks To Own Right Now: IPC The Hospitalist Company Inc.(IPCM)
IPC The Hospitalist Company, Inc., through its subsidiaries, provides hospitalist services in the United States. It engages in providing, managing, and coordinating the care of hospitalized patients and serves as the inpatient partner of primary care physicians and specialists. As of December 31, 2011, the company with its 1,201 affiliated hospitalists, including physicians, nurse practitioners, and physician assistants that are organized into medical group practices, provided hospitalist solutions at approximately 365 hospitals, and 550 other inpatient and post-acute care facilities primarily in 25 states. It also offers administrative and professional services, including information management system, transition management, regional management, recruiting, training, financial reporting, billing and collection, risk management, and compliance services to affiliated hospitalists. The company serves patients, primary care physicians, specialists, acute care hospitals, alter native sites of inpatient care, and health plans. IPC The Hospitalist Company, Inc., formerly known as InPatient Consultants Management, Inc., was founded in 1995 and is headquartered in North Hollywood, California.
Advisors' Opinion:- [By Jake L'Ecuyer]
Equities Trading DOWN
Shares of IPC The Hospitalist Company (NASDAQ: IPCM) were down 2.60 percent to $56.98 after Credit Suisse downgraded the stock from Outperform to Neutral.
10 Best Stocks To Own Right Now: Lucara Diamond Corp (LUCRF.PK)
Lucara Diamond Corp. (Lucara) is a diamond development company focused in Africa. The business of Lucara consists of the acquisition, exploration and development of diamond properties. The principal assets of Lucara and the focus of Lucara�� development and exploration activities are its interest in mining, exploration and prospecting diamond licenses in Lesotho, Botswana and Namibia. The Company�� project Mothae Diamond Project is located in northeast Lesotho. In May 2010, it commenced test mining in Mothae Diamond Project-Lesotho. Mothae Diamonds (PTY) Ltd (Mothae Diamonds), an indirect 75% owned subsidiary of the Company, holds a 100% interest in the Mothae project. As of March 23, 2011, a total of 175,000 dry tons had been processed from the C domain, producing 5,484 carats at an average grade of 3.13 carats per hundred tons. In December 2010, the Company completed the acquisition of African Diamonds PLC, upon which Lucara indirectly owns 100% of the AK6 Diamond Project. Advisors' Opinion:- [By John Leonard]
Lucara Diamond (LUCRF.PK) is still being valued as a riskier exploration stage miner rather than a profitable and growing producer. The current "backward looking" valuation fails to reflect the recent and significant operational transition.
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