I know that many investors like to look for various metric when buying stock s including things like P/E ratio or other valuation methods. One of the most popular measures is price-to-free-cash-flow.
Investors have had some degree of success over the years buying companies that trade at low multiples of free cash. Free cash flow is the actual cash the company generates after all its maintenance expenses are paid and adds back in non-cash expenses like depreciation and amortization.
Companies with free cash flow have the money to grow their business and buyback stock if they so choose. Like all valuation measures, it is critical to find the companies that have sparkling fundamentals in addition to free cash flow. Fortunately, Portfolio Grader can help us in this task.