Top Gun

Three Value Stocks That Appear Ridiculously Cheap

Trying to use a forward earnings stream has always been tough, and I have abandoned, years ago, those who use the technique with vigor. In today's world, predicting next month's costs is sometimes harder than predicting sales.

Please use something else besides the future, there is too much risk. To say the company has little debt and awesome free cash flow would be a good start, as would my favorite, cost of goods. If COGS are below 50%, a company has huge leeway to trim, even by cutting salaries in the short term. If COGS are 70% or greater, the company must cut production in order to continue cash flow. That's fine as long as large plants aren't involved.