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Zacks.com featured highlights: Broadcom, General Motors, Braskem S.A., Campbell Soup and Celanese

For Immediate Release

Chicago, IL - February 01, 2017 - Stocks in this week's article include Broadcom Limited (NASDAQ: AVGO - Free Report ), General Motors Company (NYSE: GM - Free Report ), Braskem S.A. (NYSE: BAK - Free Report ), Campbell Soup Company (NYSE: CPB - Free Report ) and Celanese Corporation (NYSE: CE - Free Report ).

Screen of the Week of Zacks Investment Research:

Trump's Immigration Ban Hits Hard: 5 ROE Stocks to Buy

he hopes surrounding Donald Trump's pro-growth agenda, including tax cut, deregulation and infrastructure spending, have been almost extinguished with the sudden implementation of a ban on immigration from seven Muslim-majority countries. The trade and healthcare proposals are expected to add to the uncertainty in the market that seemed to be in cruise control.

Amid such an equivocal scenario, investors are often on the lookout for 'cash cow' stocks that will enable them to rake in higher returns.

However, singling out cash-rich stocks alone does not make for a solid investment proposition unless they are backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting its cash at a high rate of return.

Why ROE?

ROE = Net Income/Shareholders' Equity

ROE helps investors distinguish between profit-generating companies from profit burners and is useful for determining the financial health of a company. In other words, this financial metric enables investors to identify stocks that diligently deploy cash for higher returns.

Moreover, ROE is often used to compare the profitability of a company with other firms in the industry - the higher, the better. It measures how well a company is increasing its profits without investing new equity capital in the business and portrays management efficiency in rewarding shareholders with attractive risk-adjusted returns.

Parameters Used for Screening

In order to shortlist stocks that are cash rich with high ROE, we have added Cash Flow greater than $1 billion and ROE greater than X-Industry as our primary screening parameters. In addition, we have taken a few other criteria into consideration to arrive at a winning strategy.

Price/Cash Flow less than X-Industry: This metric measures how much investors pay for one dollar of free cash flow. A lower ratio indicates that investors need to pay less for a better cash flow generating stock.

Return on Assets (ROA) greater than X-Industry: This metric determines how much profit a company earns for every dollar of asset, which includes cash, accounts receivable, property, equipment, inventory and furniture. The higher the ROA, the better it is for the company.

5-Year EPS Historical Growth greater than X-Industry: This criterion indicates that continued earnings momentum has translated into solid cash strength.

Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.

Here are five of the 18 stocks that qualified the screen:

Broadcom Limited (NASDAQ: AVGO - Free Report ) : Based in Singapore, Broadcom Limited is a premier designer, developer and global supplier of a broad range of analog semiconductor devices as well as digital, mixed-signal and optoelectronics components and subsystems. This Zacks Rank #1 stock has a trailing four-quarter average earnings surprise of 6.4% and long-term earnings growth expectation of 13.6%.

General Motors Company (NYSE: GM - Free Report ) : Detroit, MI-based General Motors is a leading global automotive manufacturer. The company filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code on Jun 1, 2009. Pursuant to this, the New GM was formed by acquiring most of the assets and assuming certain liabilities of the Old GM as well as some of its direct and indirect subsidiaries. The company has a trailing four-quarter average earnings surprise of 19.7% and long-term earnings growth expectation of 9.4%. General Motors carries a Zacks Rank #2.

Braskem S.A. (NYSE: BAK - Free Report ) : Braskem is the leading thermoplastic resins (polyethylene, polypropylene and PVC) producer in the Americas and the largest producer of polypropylene in the U.S. This Zacks Rank #1 stock has a trailing four-quarter average earnings surprise of 107.8%. You can see the complete list of today's Zacks #1 Rank stocks here .

Campbell Soup Company (NYSE: CPB - Free Report ) : Based in Camden, NJ, Campbell is a worldwide manufacturer and marketer of high-quality, branded convenience food products. The stock has modest long-term earnings growth expectation of 5.6%. Campbell carries a Zacks Rank #2.

Celanese Corporation (NYSE: CE - Free Report ) : TX-based Celanese is a global hybrid chemical company that produces chemical substances and materials. This Zacks Rank #2 stock has a trailing four-quarter average earnings surprise of 7.1% and long-term earnings growth projection of 8.8%.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today .

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks' portfolios and strategies are available at:https://www.zacks.com/performance.

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Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don't wait for the market to get better before you decide to do better. Start learning how to be a better trader today: https://at.zacks.com/?id=111

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Broadcom Limited (AVGO): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Braskem S.A. (BAK): Free Stock Analysis Report

Campbell Soup Company (CPB): Free Stock Analysis Report

Celanese Corporation (CE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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