I am a private investor who uses FCF as my primary valuation method. Some industries like financials, I will use book value as FCF is not a viable valuation method. Most importantly, I want to buy companies with the best management. Good management can ride out the tough storms (look at JPM during the financial meltdown in 2008) and emerge stronger than the competition.
While dividends are good, I prefer buybacks as they are more tax friendly. Plus, the investor can decide when to sell based on their tax situation (versus receiving dividends). Further, options can be used to generate income (such as covered calls) for income needs.
SNAPSHOT
Description: Full time investor.
Trading frequency: Daily
Interests: Options, Stocks - long, Stocks - short
COMPANY
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While dividends are good, I prefer buybacks as they are more tax friendly. Plus, the investor can decide when to sell based on their tax situation (versus receiving dividends). Further, options can be used to generate income (such as covered calls) for income needs.