I would look at both. They might tell a different story. I like to check that a company translates most of its net income into cash. I also like to see that fcf/ebitda is rather high (+75%), if not I usually do some digging to understand why. Often times a low number here will turn me off from a business, because earnings are inflated and does not represent the true earnings power of the business (which is much lower in many cases)
Thank you ,very interesting,the point I missed a lot Is to create a good check list and to stritcly follow it.in the end Is not iq buy temperamento to Say no
What's even more impressive about the Akre investment philosophy is if you include the performance of the FBR Focus Fund which Chuck Akre managed from 1997 - 2009. Here is how that fund performed versus the S&P 500 index until he left in August 2009. https://www.portfoliovisualizer.com/fund-performance?s=y&symbol=hfcsx&benchmark=vfinx&endDate=08%2F01%2F2009
Thanks for sharing this, James 🙏🏽
I have a question regarding the FCF equation: I have seen analysts using FCF / Net Earnings. Are you suggesting using EBITDA instead or Net Earnings?
I would look at both. They might tell a different story. I like to check that a company translates most of its net income into cash. I also like to see that fcf/ebitda is rather high (+75%), if not I usually do some digging to understand why. Often times a low number here will turn me off from a business, because earnings are inflated and does not represent the true earnings power of the business (which is much lower in many cases)
Thank you.!
Thank you ,very interesting,the point I missed a lot Is to create a good check list and to stritcly follow it.in the end Is not iq buy temperamento to Say no
Exactly. There are plenty of examples where «smart» people fail at managing money in the stock market