Bob Rudd
Timba: If I read you correctly, you're primarily expressing preference for a yield over a multiple...and comparing that yield, cash flow yield, to normalized CD rates. A yield, of course, is simply the reciprocal of a multiple - 6% is the same as 16.7 multiple. A matter of personal preference without much real difference, methinks.
Yes, the concept can be expressed as either a yield or it's inverse, a multiple. Since I've set up spreadsheets to assist with the calculations, I prefer yield for this one. At the inverse, a P/FCF of under 8 becomes interesting to me, but under 4 really grabs my attention.
When I look more deeply into a company, I also look at Interest Coverage, NetNet value, history of good performance, the pattern of recent performance, ESOP usage, shareholder participation in the growth (dividends, net share reductions, etc), "one-time" write offs, debt levels and current ratio.
Timba |
