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One interesting way to gauge a company’s cash flows is by comparing it to common equity. Seeing how well stockholders’ investment is generating cash has direct implications for the stock’s value...

We ran a screen on today’s rallying stocks (trading above their 20-day, 50-day, and 200-day moving averages) for those that have seen high growth in cash flow: Trailing-twelve-month (TTM) operating cash flow/common equity at least 10% higher than the 3-year average, and a 3-year average at least 10% higher than the 5-year average.

Note of caution - stock repurchases that reduce the value of common equity can boost this ratio. We compared the ratios of TTM, 3-year average, and 5-year average to establish a longer-term pattern of cash flow improvement.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these companies have been performing well? Use this list as a starting-off point for your own analysis.

List sorted by TTM operating CF/common equity.

1. ITT Educational Services Inc. (ESI):
Education & Training Services Industry. Market cap of $2.29B. The stock is currently 12.62% above its 20-day moving average, 14.7% above its 50-day MA, and 25.75% above its 200-day MA. TTM Operating CF/Common Equity at 4.93 vs. a 5-year average of 1.90. The stock is a short squeeze candidate, with a short float at 26.72% (equivalent to 10.09 days of average volume). The stock has had a couple of great days, gaining 15.33% over the last week.

2. Consolidated Communications Holdings Inc. (CNSL):
Telecom Services Industry. Market cap of $564.37M. The stock is currently 1.57% above its 20-day moving average, 3.06% above its 50-day MA, and 6.61% above its 200-day MA. TTM Operating CF/Common Equity at 1.78 vs. a 5-year average of 0.89. The stock has gained 23.12% over the last year.

3. Terra Nitrogen Company, L.P. (TNH):
Agricultural Chemicals Industry. Market cap of $2.27B. The stock is currently 3.96% above its 20-day moving average, 10.17% above its 50-day MA, and 20.52% above its 200-day MA. TTM Operating CF/Common Equity at 1.55 vs. a 5-year average of 1.29. The stock has gained 99.11% over the last year.

4. Netflix, Inc. (NFLX): Music & Video Stores Industry. Market cap of $13.77B. The stock is currently 2.46% above its 20-day moving average, 6.88% above its 50-day MA, and 32.11% above its 200-day MA. TTM Operating CF/Common Equity at 1.49 vs. a 5-year average of 0.86. The stock has had a good month, gaining 10.93%.

5. Annaly Capital Management, Inc. (NLY):
REIT. Market cap of $15.03B. The stock is currently 1.99% above its 20-day moving average, 3.47% above its 50-day MA, and 7.89% above its 200-day MA. TTM Operating CF/Common Equity at 1.27 vs. a 5-year average of 0.80. The stock has gained 23.94% over the last year.

6. Ocwen Financial Corp. (OCN): Savings & Loans Industry. Market cap of $1.25B. The stock is currently 3.48% above its 20-day moving average, 7.21% above its 50-day MA, and 21.65% above its 200-day MA. TTM Operating CF/Common Equity at 0.96 vs. a 5-year average of 0.29. The stock is a short squeeze candidate, with a short float at 7.73% (equivalent to 9.56 days of average volume). The stock has had a couple of great days, gaining 6.28% over the last week.

*Operating CF/Equity data sourced from Screener.co, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 6 Rallying Stocks Showing High Growth in Cash Flows