Let's get back to evaluating the free cash flow of Intel, our test case.
Andrew, you are quite right that you really can't use raw free cash flow share numbers to rank stocks, although they ARE useful for winnowing out the real losers.
In another sense, you can't use price/free cash flow ratios, either. That ratio will tell you how much you are paying for Company X's free cash flow, of course, but it still won't tell you how that company ranks vis-a-vis other companies in terms of its free cash flow. (For example, Company X might be a very popular stock, for very good reasons, and would therefore have high valuation ratios across the board. Or the reverse could be true.)
The sheer amount of free cash flow -- $8 million for Company X, #1 million for Company Y -- doesn't tell you that much either. ( Company X might be 8 times larger than Company Y.)
Anyone know of a way (an EASY way, please) to rank companies in terms of their present FCF (not projected future, please)?
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