predicting free cash flow. delete if inappropirate for the board please.
First, if this topic is off topic, please delete it. I apologize in advance for that. I believe that picking a company that is selling for less than what it is worth, but also that is growing fast is a good way to invest. I think free cash flow is the best metric, because it is harder to manipulate, and company’s need cash like a human needs blood. I value a company based on it’s free cash flow in 2 – 3 years. The challenge is Of course that it is hard to estimate it. I have a few things I do. I look at past free cash flow, and decide if the company is still executing it well, and extrapolate it into the future. I look at ROIC. A company’s free cash flow should grow at it’s ROIC. I look at analyst estimates, and for a popular stock, subtract maybe 10%, for a boring stock, maybe subtract 3%. I wonder how the people here do it and your thoughs on this.