The Inside Scoop
By James K. Glassman
Sunday, June 20, 1999; Page H01
"Free cash flow" is the cash profits that companies hold after outlays for
dividends and investments in new plant and equipment. In other words, this
is money that will someday flow to shareholders--or be used to buy other
companies, whose profits will flow to shareholders. Copious free cash
flow--rather than straight reported earnings--is what smart investors such
as Warren Buffett look for in a company.
Value Line regularly computes the figure for its weekly Investment Survey
(1-800-833- 0046). Here are the top free-cash generators that receive a
rating of 1 (best) from the research service for timeliness and at least 3
(average) for safety: VISX Inc. (VISX), Dionex Corp. (DNEX),
PacifiCare Health Systems Inc. (PHSYA), Cisco Systems Inc. (CSCO),
Dell Computer Corp. (DELL), CDW Computer Centers Inc. (CDWC),
Tellabs Inc. (TLAB), Jones Apparel Group Inc. (JNY), Xilinx Inc.
(XLNX), EMC Corp. (EMC), United HealthCare Corp. (UNH),
Kenneth Cole Productions Inc. (KCP) and Express Scripts Inc. (ESRX).
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