4 Undervalued Stocks With Solid Cash Flow Growth

Kapitall submits:If you're interested in gaining exposure to U.S. consumer growth, the following list might interest you.Below is a list of 4 consumer goods companies that have seen faster growth in quarterly operating cash flow than quarterly net income year-over-year. Comparing growth in cash flow and growth in net income is helpful because it indicates whether cash or accruals is becoming an increasingly larger part of earnings.

Kapitall submits:Growth in reported net income is comprised of growth in actual cash flows and growth in accruals, the latter representing estimates made by management. Because accruals are estimates, a smaller percent of accruals is often correlated with higher earnings quality, or a higher persistence of earnings. Therefore a measure of earnings quality is a comparison between operating cash flows and net income.

Kapitall submits:Below we present three companies that have been identified as potential takeover / leveraged buyout (LBO) candidates by UBS and Street Insider. Notably, these 3 companies also have operating cash flow growth that is exceeding their net income growth – an encouraging sign of earnings quality, as well as financial health. (To access the complete list of 200+ takeover targets, click here.)

Kapitall submits:The following is a list of 7 oil related stocks that have seen operating cash flows accelerate faster than net income during the most recent quarter. Since these companies are generating cash at a faster pace, it might offer an interesting starting point for your own analysis...

Kapitall submits:Do you prefer companies with a track record of releasing higher-than-expected earnings? If so, this list may be just up your alley.Below we present 20 stocks that are undervalued relative to earnings growth (PEG less than 1) as well as free cash flow (P/FCF less than 10).

Kapitall submits:Because of the many accounting estimates used to calculate net income, one way to gauge its reliability is by comparing it to operating cash flow. Since cash flow is very hard to manipulate on the books, it is a good measuring stick for performance.With that in mind, we screened about 120 large cap stocks for those that have seen faster growth in quarterly operating cash flow year-over-year than that seen in quarterly net income.

Kapitall submits:One way to search for undervalued stocks is by looking for recent underperformers that have strong operation trends. If a company’s operations are healthy, stock underperformance may be a great opportunity to buy in.Here we list 4 stocks that are trading just above their 52-week lows. However, these stocks have also exhibited healthy growth in quarterly operating cash flow year-over-year, in excess of growth in quarterly net income for the same period. click for expanded images

Kapitall submits:If you are looking for interesting momentum ideas, this list may offer an interesting starting point.All the stocks in this list are U.S. based - with market caps above $300M - and they are trading above their respective 20-, 50-, and 200-day moving averages. Additionally, all these names are trading at below industry benchmarks according to the following valuation metrics: