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 Guidance Software (Nasdaq: GUID ) , whose recent revenue and earnings are plotted below.
Top 5 Consumer Service Companies To Buy For 2014: Norbord Inc Com Npv(NBD.TO)
Norbord Inc., together with its subsidiaries, engages in the manufacture, sale, marketing, and distribution of wood-based panels in North America and Europe. It provides oriented strand board, medium density fiberboard, particleboard, and related value-added products for use in the construction of new homes, and renovation and repair of existing structures. The company offers its products primarily under the Pinnacle, Stabledge, Truflor, Tallwall, Trubord, Windstorm, SolarBoard, SterlingOSB, Caberwood MDF, Conti, and Caberboard names. Norbord Inc. sells its products to retail chains, contractor supply yards, industrial users, wholesale distributors, and industrial customers. The company was formerly known as Nexfor Inc. and changed its name to Norbord Inc. in 2004. Norbord Inc. was founded in 1987 and is headquartered in Toronto, Canada.
Top 5 Consumer Service Companies To Buy For 2014: Inventure Foods Inc.(SNAK)
Inventure Foods, Inc. engages in the development, production, marketing, and distribution of snack food products and frozen berry products to grocery retailers, mass merchandisers, club stores, convenience stores, and vend distributors in the United States and internationally. The company manufactures and markets various healthy/natural and indulgent specialty snack food products under its own and licensed brand names. Its healthy/natural food products include the Rader Farms brand frozen berries; the Jamba brand smoothies; and the Boulder Canyon Natural Foods brand snack chips, including kettle cooked potato chips, rice and bean snack chips, and hummus tortilla chips. The company?s indulgent specialty foods comprise the T.G.I. Friday?s brand snacks; the BURGER KING brand snack products; the Poore Brothers brand kettle cooked potato chips; the Bob?s Texas Style brand kettle cooked chips; the Tato Skins brand potato snacks; and the O?Boises brand potato snacks. Its products also include multi-grain puffs, no salt kettle cooked potato chips, cheddar crunchy bites, zesty ranches, and blend-and-serve smoothie kits. In addition, the company manufactures and distributes private label and co-branded fruit and snack chip products for grocery chains and natural stores. Further, it purchases and resells snack food products, including pretzels, popcorn, dips, and meat snacks manufactured by others in Arizona. The company was formerly known as The Inventure Group, Inc. and changed its name to Inventure Foods, Inc. in May 2010. Inventure Foods, Inc. was founded in 1986 and is headquartered in Phoenix, Arizona.
Top 10 Casino Companies To Watch In Right Now: Associated Banc-Corp(ASBC)
Associated Banc-Corp, a bank holding company, offers various banking and financial services to individuals and businesses primarily in Wisconsin, Illinois, and Minnesota. Its Banking segment provides loans and deposit products to businesses, governments, and consumers. Its products and services include checking, savings, money market deposit, and IRA accounts, as well as certificates of deposit and safe deposit boxes; and home equity loans and lines of credit, residential mortgage loans and mortgage refinancing, education loans, and personal and installment loans. This segment?s products and services also include business checking accounts, business loans, real estate financing, construction loans, letters of credit, revolving credit arrangements, business credit cards, equipment and machinery leases, night depository, cash management, international banking, check clearing, safekeeping, and other banking-based services. The company?s Wealth Management segment provides va rious fiduciary, investment management, advisory, and corporate agency services for individuals, corporations, small businesses, charitable trusts, endowments, foundations, and institutional investors. This segment also offers life, property, casualty, and credit and mortgage insurance, as well as fixed annuities and employee group benefits consulting and administration services; investment brokerage, variable annuities, and discount and online brokerage services; and trust/asset/investment management, administration of pension, profit-sharing and other employee benefit plans, personal trusts, and estate planning services. The company offers its products through branch facilities, loan production offices, supermarket branches, a customer service call center, an interstate automated teller machine network, and Internet banking services. As of December 31, 2010, its banking subsidiary had 280 offices in approximately 150 communities. The company was founded in 1964 and is base d in Green Bay, Wisconsin.
Top 5 Consumer Service Companies To Buy For 2014: Avexa Ltd (AVX.AX)
Avexa Limited, a biotechnology company, engages in the discovery, development, and commercialization of anti-infective pharmaceutical medicines for the treatment of human infectious diseases. The company�s research programs primarily focus on the discovery of medicines for the treatment of the diseases caused by human immunodeficiency virus (HIV) and vancomycin- and methicillin-resistant bacteria. Its principal projects include apricitabine, a nucleoside reverse transcriptase inhibitor for the treatment of HIV infection; and an HIV integrase inhibitor program. The company, through its license agreement with Valevia Pharmaceuticals GmbH, also develops AVX13616, an anti-bacterial lead compound for antibiotic-resistant bacterial infections. The company was founded in 2004 and is based in Richmond, Australia.
Top 5 Consumer Service Companies To Buy For 2014: New Crocodile Gold (CRK.TO)
Crocodile Gold Corp. engages in the acquisition, exploration, development, and operation of gold properties. The company�s principal properties include the Burnside, Union Reefs, Pine Creek, Moline, and Maud Creek projects, which cover an area of approximately 2,979 square kilometers and are located in the Northern Territory of Australia. It also has operations in Canada and Peru. Crocodile Gold Corp. is headquartered in Toronto, Canada.
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