Everyone needs cheap stocks for a
solid return. But what cheap really means depends on your growth expectations.
I tell you that
earnings are not equal to free cash flow. Some companies need much money to
grow or they put large amounts of cash into the business to keep them alive due
to high amortizations.
If you look for
cheap stocks, you also need to cheap price to free cash flow ratios.
Today I would like
to introduce a few dozen or and a few more stocks with a cheap price to free cash
flow ratio (less than 15). A ratio under 15 indicates that the potential payout
yield is over 6.67%.
In addition, I've
only listed those stocks with a positive earnings growth outlook for the next
five years. That's in my view a method to filter only well-running business.
Despite the tight
criteria, the screen also produced some struggling companies like BHP or Rio
Tinto. I like them for sure but I do believe that they are not worth investing
while the commodity price still low or at multi-year lows.
Here are the
results from my screen...
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| 19 Cheap Stocks With A Free Cashflow Yield Over 6.67% (click to enlarge) |
I think there are a few good names on my latest screen. Do you like any of them? Please leave a comment if you. Thank you.