Chicago, IL – April 10, 2025 – Stocks in this week’s article are StoneCo Ltd. STNE, Associated Banc-Corp ASB, EnerSys ENS and General Motors Co. GM.
U.S. equities closed lower yesterday after a rollercoaster trading day, marked by initial optimism overshadowed by escalating trade tensions between the United States and China. Sentiment quickly soured as news of 104% tariffs on Chinese imports emerged, sending the Dow Jones Industrial Average plummeting 320 points. Concurrently, the S&P 500 and Nasdaq Composite indices also faltered, declining 1.6% and 2.2%, respectively.
Many analysts now speculate that these tariffs could potentially deepen economic woes, raising fears of a looming recession and prompting speculation on future Federal Reserve actions regarding interest rates. Amid such a scenario, value stocks could draw attention as a compelling investment option. Typically trading below their intrinsic value, these stocks offer a margin of safety during market fluctuations.
When evaluating value stocks, one of the most effective valuation metrics is the Price to Cash Flow (P/CF) ratio. This metric measures the market price of a stock relative to the cash flow the company generates on a per-share basis. A lower P/CF ratio indicates that the stock is trading at a better value, offering strong cash generation potential relative to its price. Here are four companies — StoneCo Ltd., Associated Banc-Corp, EnerSys and General Motors Co.
Questions may arise as to why we are considering the P/CF valuation metric when the most widely used metric is Price/Earnings (or P/E). Well, what makes P/CF stand out is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, reflecting a company's financial health.
Analysts caution that a company’s earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. It is net cash flow that reveals how much money a company is actually generating and how effectively management is putting the same to use.
A positive cash flow indicates an increase in the company’s liquid assets. This gives the company the means to settle debt, shell out for its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Then again, a negative cash flow implies a decline in the company’s liquidity, which lowers its flexibility to support these moves.
Here are four of the 15 value stocks that qualified the screening:
Stone, a leading provider of financial technology and software solutions, sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 5.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Stone’s current financial year sales suggests growth of 4.1% from the year-ago period. STNE has a Value Score of B. Shares of STNE have fallen 36.9% in the past year.
Associated Banc-Corp, the largest bank holding company based in Wisconsin, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 4.9%, on average.
The Zacks Consensus Estimate for Associated Banc-Corp’s current financial year sales and earnings per share (EPS) implies growth of 9.9% and 2.1%, respectively, from the year-ago period. ASB has a Value Score of B. Shares of ASB have declined 8.1% in the past year.
See the Zacks Earnings Calendar to stay ahead of market-making news.
EnerSys, the global leader in stored energy solutions for industrial applications, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for EnerSys’ current financial year sales and EPS indicates growth of 1% and 19.8%, respectively, from the year-ago period. ENS has a Value Score of A. Shares of ENS have fallen 13.4% in the past year.
General Motors, which designs, builds and sells cars, trucks, crossovers and automobile parts globally, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 15.8%, on average.
The Zacks Consensus Estimate for General Motors’ current financial year EPS suggests growth of 8.6% from the year-ago period. General Motors has a Value Score of A. Shares of GM have dipped 3.3% in the past year.
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General Motors Company (GM) : Free Stock Analysis Report
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StoneCo Ltd. (STNE) : Free Stock Analysis Report
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