There are many ways to value a company. Price to earnings. Price to cash flow. Liquidation value. Price per eyeballs on website. Price to a number I completely made up (this one never gets old). Price to CEO's ego divided by lobbying activity as a percentage of revenue (this one doesn't get used enough). Which one is best? They're all limited and reliant on assumptions. No single metric holds everything you need to know.
The metric I'm using today is no different. But it's perhaps the most encompassing, and least susceptible to hidden complexities of a company's financial statements. The more I think about it, the more I feel it's one of the most useful metrics out there. What is it? Enterprise value over unlevered free cash flow. Using this metric, here are five companies I found that look attractive: Ford (NYSE: F), ConAgra (NYSE: CAG), Visa (NYSE: V), Clorox (NYSE: CLX) and Paychex (Nasdaq: PAYX)
Source: Motley Fool
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Posted by D4L | Thursday, November 03, 2011 | ArticleLinks | 0 comments »________________________________________________________________
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