Low-debt, cash-rich companies available at attractive valuations
Investment Rationale
Earnings in the income statements of companies can sometimes be misleading. Many celebrated investors like Warren Buffett have argued in favour of using free cash flow over other criteria.
- Free cash flow gives an idea about the cash position of the company by subtracting the investments from the cash generated from operations
- Free cash flow is very transparent as it reflects the exact cash position of the company, making valuation easy and simple
- This smallcase consists of cash-rich companies that are growing their free cash flow and reducing debt burden, yet are available at lower valuations
smallcase is played out