The price/cash flow ratio is a price-multiple valuation metric that also measures a firm’s future financial health. An advantage of using cash flow is that it removes non-cash factors, which helps provide a clearer picture of how much money the firm is taking in from a valuation standpoint.
Earnings per share growth (1-fiscal year) provides a good idea of earnings growth over an extended period of time. This metric helps identify which firms are increasing or decreasing relative to profitability. EPS growth is thought to be a key driver for a company’s share price given its correlation to firm profitability.
We ran a screen for companies, which have substantially retraced from their 52-week highs and hold a P/CFO ratio of less than 10. From this narrowed pool we then screened for firms that had an EPS growth rate (1-year fiscal) of at least 10% or greater.
The price/CFO ratio ranks the list from lowest to highest:
Barclays PLC. (BCS)
Sector | Financial Services |
Industry | Banks - Global |
Market Cap | $28,157 million |
Beta | 2.84 |
The company offers investment banking, asset management, and risk management services. The firm has a 1-year fiscal EPS growth rate of 25.55%. BCS’s P/CFO ratio is 0.71.The firm is 57.40 % below its 52-week high. The short interest was N/A as of 08/31/2011.
Bbva Banco Frances,S.A.(BFR)
Sector | Financial Services |
Industry | Banks - Regional - Latin America |
Market Cap | $1,100 million |
Beta | 1.68 |
The company offers general banking services to corporate and retail services. The firm has a 1-year fiscal EPS growth rate of 51.70%. BFR’s P/CFO ratio is 1.13.The firm is 55.60% below its 52-week high. The short interest was N/A as of 08/31/2011.
Community Health Systems Inc. (CYH)
Sector | Healthcare |
Industry | Medical Care |
Market Cap | $1,592 million |
Beta | 1.58 |
The company owns and leases acute care hospitals in non-urban communities. The firm has a 1-year fiscal EPS growth rate of 14.02%. CYH’s P/CFO ratio is 1.28.The firm is 59.81 % below its 52-week high. The short interest was 4.70% as of 08/31/2011.
Cosan Ltd. (CZZ)
Sector | Consumer Defensive |
Industry | Farm Products |
Market Cap | $2,764 million |
Beta | 2.09 |
The company is a sugar and ethanol in Brazil. The firm has a 1-year fiscal EPS growth rate of 40.80%. CZZ’s P/CFO ratio is 1.62.The firm is 30.73 % below its 52-week high. The short interest was N/A as of 08/31/2011.
James River Coal Company. (JRCC)
Sector | Basic Materials |
Industry | Coal |
Market Cap | $276 million |
Beta | 2.08 |
The company mines and sells bituminous, steam, and industrial-grade coal within the US. The firm has a 1-year fiscal EPS growth rate of 52.43%. JRCC’s P/CFO ratio is 1.65.The firm is 71.40 % below its 52-week high. The short interest was N/A as of 08/31/2011.
Aflac Inc. (AFL)
Sector | Financial Services |
Industry | Insurance - Life |
Market Cap | $15,505 million |
Beta | 1.99 |
The company is a holding firm that operates subsidiaries that sell supplemental health and life insurance. The firm has a 1-year fiscal EPS growth rate of 55.17%. AFL’s P/CFO ratio is 1.88.The firm is 44.26 % below its 52-week high. The short interest was 1.70% as of 08/31/2011.
Navios Maritime Holdings Inc. (NM)
Sector | Industrials |
Industry | Shipping & Ports |
Market Cap | $337 million |
Beta | 2.84 |
The company operates a fleet of ships that transport bulk commodities. The firm has a 1-year fiscal EPS growth rate of 90.77%. NM’s P/CFO ratio is 1.88.The firm is 47.38 % below its 52-week high. The short interest was 1.70% as of 08/31/2011.
Assured Guaranty Ltd. (AGO)
Sector | Financial Services |
Industry | Insurance - Specialty |
Market Cap | $1,872 million |
Beta | 2.53 |
The company offers credit structured finance, enhancement products, and mortgage market services. The firm has a 1-year fiscal EPS growth rate of 286.67%. AGO’s P/CFO ratio is 1.97.The firm is 54.44 % below its 52-week high. The short interest was N/A as of 08/31/2011.
SLM Corp. (SLM)
Sector | Financial Services |
Industry | Credit Services |
Market Cap | $6,516 million |
Beta | 1.32 |
The company originates and holds student loans in the United States. The firm has a 1-year fiscal EPS growth rate of 27.06%. SLM’s P/CFO ratio is 1.98.The firm is 25.95 % below its 52-week high. The short interest was 1.90% as of 08/31/2011.
Boyd Gaming Corporation. (BYD)
Sector | Consumer Cycl |
Industry | Resorts & Casinos |
Market Cap | $465 million |
Beta | 2.57 |
The company is a gaming company. The firm has a 1-year fiscal EPS growth rate of 140.00%. BYD’s P/CFO ratio is 2.01.The firm is 57.82 % below its 52-week high. The short interest was N/A as of 08/31/2011.
We hope this list helps investors as they do their own due diligence on companies with low P/CFO ratio’s while continuing to grow their EPS.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
