MarkGillCPA

Invest Using Stocks' Price to Free Cash Flow

I've read where Bruce Berkowitz at Fairholme looks for stocks with a free cash flow yield of 10% or better, and it's a metric I like to use. Your 15 multiple requirement would be equivalent to a FCF Yield of 6.67%, which is not too far removed from that metric. However, I haven't considered using FCF on invested capital. I just use the standard ROIC. Interesting. Good article.