RE:KelvinWell CB69 I bet that most people have them on ignore or simply skim over their posts. I'm caught up in this metric " free cash flow yield" now. Investopedia defines it as follows: "What Is Free Cash Flow Yield? Free cash flow yield is a financial solvency ratio that compares the free cash flow per share a company is expected to earn against its market value per share. The ratio is calculated by taking the free cash flow per share divided by the current share price."
So as you increase sp (the denominator) for a given amount of fcf per share (numerator) then the fcf yield decreases. So if 39% fcf yield is great then a lower percentage fcf yield would be better or worse? Let's say that sp remains constant and fcf per share goes down. Then fcf yield goes down as well. But that may not be such a bad thing if a company spent most of their income on capex leaving little fcf where that capex will generate, say, 20% yearly returns on capital. Such a confusing ratio for me to wrap my head around.
Anyway yeah got lots of smart people on this board. I am thankful for that. But I gotta figure out this fcf yield thing and why people talk about it so much.