To: HeyRainier who wrote (137 ) 1/6/1998 8:14:00 PM From: ftth Respond to
[contrarian screen results]Hi Rainier, here's the results of your screen. Lots of ways to calculate each of these (using trailing, fiscal year, projected, or some combination thereof), so the results may vary by a change in one time frame. Cash flow, as you know, also has many variations and requires detailed study of the footnotes in the statement of cashflows, as well as a close look at trends in D&A, discretionary capital spending, deferred taxes, debt repayments, preferred dividends, and a few others I'm sure I left out. Even "free cash flow" doesn't really have a standardized definition. After spending MUCH time trying to develop a way to easily scan a universe of stocks using cash flow, I came to the conclusion that the best thing to do was search for at least 2 years of positive and increasing cash flow from operations and the same for net income, then weed it out further manually. Fixed ratios applied to the whole universe were too restrictive and inconsistent (entire industry groups were left out when in fact investors may pose no penalty for high ratios in some industry groups, e.g software). Also, sales-related ratios may unfairly leave out entire industry groups (e.g. some financials). In any event, here's the screen I ran:
