Send me real-time posts from this site at my email

A Firm's First Profit Can Mean Big Returns for Investors

We are already roughly halfway through second-quarter 2019 earnings season. Many of the biggest companies and all of the so-called FAANG stocks, from Amazon (AMZN) to Facebook (FB), have reported—with Apple (AAPL) set to release its quarterly results after the closing bell Tuesday. This means now could be a great time to look at a ‘First Profit’ stock screen.

The idea here is to search for companies that just reported their first quarterly profit within the last year. More specifically, the screen searches for firms that just posted their first profit last quarter after not posting a profit for at least the previous 4 quarters. Clearly, this is a screen best run after every earnings season.

These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history. Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the turn to profit could spark a turning point that management had promised or Wall Street had been clamoring for.

The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable or is just reaching that key inflection point.

With that said, some investors will not touch companies that can’t show a profit. On top of that, there are many more who won’t consider a stock unless it’s making money.

Obviously, losing less money than the prior quarter is a positive sign, as it shows growth. Then firms hit a point where they grow and grow and eventually become profitable. These are the stocks that will likely see more demand from new investors…

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

(Stocks that are trading for less than $5 are more speculative.)

The screen is pretty simple yet pretty powerful.

Here are 5 stocks that made it through this week's screen… all of the companies either just reported positive earnings, or did so last quarter and are set to release their results soon.

Diebold Nixdorf, Incorporated (DBD)

Esperion Therapeutics, Inc. (ESPR)

Viasat Inc. (VSAT)

Impinj, Inc. (PI)

XOMA Corporation (XOMA)

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

Click here to sign up for a free trial to the Research Wizard today.

Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.

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.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at:

Today's Stocks from Zacks' Best Screens

Now would you like to screen for the latest stocks from Zacks' most successful strategies? From 2017 through 2018, while the market gained +15.8%, we saw results like these: Big Money Zacks +38.0%, Small-Cap Growth +61.3%, Technical Analysis & Fundamental Analysis +61.6%, New Highs +68.1%, and Filtered Zacks Rank 5 +98.3%.

You're invited to screen the latest stocks in seconds by trying Zacks' Research Wizard stock-picking program. Or use the Wizard to create your own market-beating strategies. No credit card needed, no cost or obligation.

Try it for 2 weeks free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
XOMA Corporation (XOMA): Free Stock Analysis Report
Viasat Inc. (VSAT): Free Stock Analysis Report
Impinj, Inc. (PI): Free Stock Analysis Report
Facebook, Inc. (FB): Free Stock Analysis Report
Esperion Therapeutics, Inc. (ESPR): Free Stock Analysis Report
Diebold Nixdorf, Incorporated (DBD): Free Stock Analysis Report, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome!!! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue