Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.

Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.

Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?

You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.

If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.

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Friday, June 27, 2008

Zacks Earnings and Margins Strategy highlights: Adidas AG, Treehouse Foods, PH Glatfelter, United West Bancorp

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CHICAGO, Jun 27, 2008 (BUSINESS WIRE) ----Earnings are the single most important metric for a company. Combine that with a healthy Net Profit Margin and you find a screen that has generated a cumulative return of +623.7% since January 2001. For 2006, this Profit Track has returned 23.4%. For the first month of 2007, this Profit Track returned 4.0%. This screen is called the Earnings and Margins Profit Track strategy. Here are four stocks meeting this screen's exclusive criteria: Adidas AG (OTC: ADDYY), Treehouse Foods Inc. (NYSE: THS), PH Glatfelter Co. (NYSE: GLT), United West Bancorp Inc. (NASDAQ: UWBK). View the entire list of stocks for the Earnings and Margins Profit Track at http://at.zacks.com/?id=1858.

Here are four companies that meet the following Earnings and Margins Profit Track:

Adidas AG (OTC: ADDYY) is a leading brand in the sporting goods market with strong positions in footwear, apparel and hardware. The Zacks #1 Rank company reported outstanding first quarter earnings of 59 cents per share, which exceeded analysts' expectations of 36 cents. ADDYY is currently enjoying an average broker rating of 1 and a growth rate of 31.10%, which place it on the Earnings and Margins profit track. The company also sports a net margin of 5%.

Treehouse Foods Inc. (NYSE: THS) is a food manufacturer servicing primarily the retail grocery and foodservice channels. In the first quarter, THS delivered an EPS surprise of 20%. The Zacks #2 Rank company enjoys a net margin of 4%, indicating that it is a solid company with good earnings. Moreover, THS sports an average broker rating of 1 and a growth rate of 24.53%

PH Glatfelter Co. (NYSE: GLT) announced first-quarter results on Apr 29 that beat analysts' expectations. Year-over-year earnings amounted to 25 cents per share, compared to 12 cents. GLT currently enjoys a net profit margin of 6% and a Zacks #1 Rank, which qualifies this company for the Earnings and Margins profit track. In addition, GLT sports an average broker recommendation of 1 and a growth rate of 47.27%. GLT is a paper manufacturing company that manufactures printing papers and tobacco and other specialty papers.

United West Bancorp Inc. (NASDAQ: UWBK) reported a 32% increase in year-over-year first quarter earnings, which amounted to 46 cents per share. On Jun 16, UWBK paid a dividend of six cents to shareholders of record on Jun 5. This Zacks #2 Rank company makes the grade for this profit track with a growth rate of 13.43% and an average broker recommendation of 1. UWBK is a holding company that focuses on traditional banking, mortgage banking, and the administration of self-directed trust accounts.

Discover all the current stocks currently on the Earnings and Margin Profit Track at: http://at.zacks.com/?id=1859

About Profit Tracks

What is a "Profit Track"? Each Profit Track is a successful stock picking strategy with proven results through the Bear Market of 2001-2002 and the Bull run started in 2003. On Zacks.com we have created these nine unique screens to offer investors great strategies to potentially outperform the market in the years ahead. In 2006, the Low Price Stocks strategy was the top performing Profit Track with a return of +56.5% followed by the Discounted Fundamental screen with a +34% return. To see all nine strategies along with philosophy, past performance and current stocks, go to http://at.zacks.com/?id=1838.

All the Profit Track strategies were created and backtested using the Research Wizard software from Zacks Investment Research. If you like this screening strategy, but want to narrow down the list of stocks and even improve the performance, then you should start a free trial to this powerful stock picking tool. Learn more about the Research Wizard free trial offer and our new special report "Top 10 Stock Screening Strategies" at http://at.zacks.com/?id=4633.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4634.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE: Zacks.com

Zacks.com
   Alla Kushner Phone: 312-265-9208 Email: pr@zacks.com

Copyright Business Wire 2008 **********************************************************************
   As of Monday, 06-23-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an
   UPTREND on 03-28-2008 for GLT @ $15.02. As of Monday, 06-23-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern
   recognition system, indicated an UPTREND on 02-06-2008 for THS @ $22.38. As of Monday, 06-23-2008 23:59, the latest Comtex
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