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Free cash flow is the cash that a company makes after paying out the money required to maintain and/or expand the business. Free cash flow enables a company to pursue acquisitions and growth initiatives, among other options. FCF may also allow a company to initiate or increase dividends.

Many investors believe that a company’s free cash flow is one of the more important fundamental metrics in evaluating an equity investment. Some have agued that Wall Street is focused on revenue and earnings, which are more easily manipulated through accounting, without direct concern for calculating the actual money that a business is generating.
Free cash flow [FCF] is operating cash flow minus capital expenditures.

I started this screen for strong FCF equities by limiting it to mid-caps (companies with market valuations of $2-$10 billion). I screened for only those that have 10% Earnings Per Share over the past 5 years and a current price to FCF of fewer than 10. Others may meet these criteria, such as those listed here, and please add any you feel others should know about in the comments.

Symbol
Company
Industry
Market Cap
P/E
P/FCF
(AGP)
AMERIGROUP Corporation
Health Care Plans
$3.24 B
10.98
5.38
Cephalon Inc.
Biotechnology
$6.07 B
12.16
9.54
(CKH)
Seacor Holdings Inc.
Shipping
$2.05 B
8.01
9.76
(GPN)
Global Payments Inc.
Business Services
$3.93 B
20.07
6.6
Lifepoint Hospitals Inc.
Hospitals
$2.05 B
13.06
9.49
(NRG)
NRG Energy, Inc.
Electric Utilities
$5.73 B
42.48
5.8
(SHS)
Sauer-Danfoss Inc.
Diversified Machinery
$2.09 B
7.98
7.98
(TRW)
TRW Automotive Holdings Corp.
Auto Parts
$6.45 B
7.45
8.1
(URS)
URS Corporation
Technical Services
$3.27 B
13.2
6.47

While on its own, free cash flow is likely insufficient to base an investment decision, it is an important metric and one that is rarely provided. Such information can help you get a greater understanding of the fundamentals of businesses and identify proper investments.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 9 More U.S. Mid-Caps With Strong Free Cash Flow