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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: petal who wrote (65016)	10/1/2020 7:37:32 PM
From: E_K_S	2 Recommendations Recommended By petal Sisyphus Respond to of 78777

Re: FCF For dividend payers I look at FCF and payout ratio especially if there are one time write downs. CVX took some write downs so earnings were so low that it did not even cover their dividend (several quarters). But they generated more than enough FCF to cover their dividend. I would look at payout ratio per share of FCF (div/FCF per share). Also use a similar way to analyze REIT dividends; AFFO Adjusted Funds From Operations and or FFO (Funds From Operation) as the depreciation expense is not included in these numbers. REITs typically report FFO per share and/or AFFO per share for this reason. So it is important to look at FCF/share especially if the company is going through a restructuring (writing down Goodwill) and/or consolidating an acquisition. Many times if/when there is a value proposition, there are company specific problems that must be solved by management. That typically requires write downs and restructuring (could include layoff). That usually results in a hit to earnings for a few quarters. This is when you also look at their FCF. EKS

To: petal who wrote (65016)	10/2/2020 1:25:30 AM
From: bruwin	Read Replies (1) \| Respond to of 78777

"I would just say that Buffett too looked at the price... It determines when to buy" Once AGAIN you're missing the point about my reference to "PRICE". My reference to "PRICE" has to do with putting "PRICE" into a mathematical ratio, such as EV, and expecting it to give you a MEANINGFUL answer when that mathematical ratio can VARY over short periods of time due to the fact that "PRICE" varies over a short period of time !! CAPICE ??!! And, Yes, Buffett does consider a stock's price, BUT he does it primarily via his EQUITY BOND analysis as in ----> Message 26421355 BECAUSE Buffett, first of all, looks for stocks that comply with his DURABLE COMPETITIVE ADVANTAGE (DCA) requirement. And he uses the TARGET PERCENTAGE RATIOS I've been telling you about in order to weed them out. It's reasonably SUMMARISED here ---> Message 29804904 Once he finds them, he buys them at as low a price as possible and keeps them. THEN ..... when there's a general FALL OFF IN THE STOCK MARKET, through no fault of his DCA companies, Buffett starts to get "GREEDY" when everyone else is "FEARFUL" because he knows that the share price of DCA, quality, companies will INEVITABLY RISE AGAIN .... CAPICE ?? IMO, the problem with a lot of these "popular ratios", such as P/Bk, P/S, EV, etc, is that the folk who contrived them very likely did not have AN ADEQUATE GRASP OF BASIC MATHEMATICS, seeing as the majority of those ratios rely on a number that varies over SHORT PERIODS of time. The ratio "P/E" is slightly different to the others because it says, in principle, that if you buy a share for "P" now and the earnings per share per year is "E", then it will, theoretically take "P/E" years to "recover" what you paid for that share. "GOOD FORTUNE" to you too .........

To: petal who wrote (65016)	10/2/2020 2:47:50 PM
From: Paul Senior	3 Recommendations Recommended By sjemmeri Spekulatius The_Commodore Read Replies (1) \| Respond to of 78777

I do spend too little time reading annual reports and looking at income statements and balance sheets in depth. It's becoming all too clear, and all the time clearer, to me that there really is now way around that – that's how you achieve consistent exceptional returns over a long period of time (and probably the only way) : you get to know the company intimately. I didn't want to let this get by without somebody commenting. So I will: I'm one who does not believe that that is The Way or a way to achieve consistent exceptional returns. (Just my response to a general statement -- i.e. you and I (and/or others) have not agreed on definitions -- "consistent", "exceptional", "long period of time", etc.).