While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. In fact, the rate compares to the industry average of 6.3%. Right now, year-over-year cash flow growth for ArcBest is 8%, which is higher than many of its peers. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds. While cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. The company's EPS is expected to grow 119.2% this year, crushing the industry average, which calls for EPS growth of 58.6%. While the historical EPS growth rate for ArcBest is 38.6%, investors should actually focus on the projected growth. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration. Here are three of the most important factors that make the stock of this freight transportation and logistics company a great growth pick right now.Įarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). Studies have shown that stocks with the best growth features consistently outperform the market. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.
ArcBest (ARCB) is one such stock that our proprietary system currently recommends.
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