Effective stock screener is essential for shortlisting of stocks based on quantitative methods. Of course we will also consider qualitative factors such as management, business models, industry outlook, corporate governance etc.
I have recently added one quantitative parameter in my screener and that concerns free cash flow (FCF). If any PLC can generate strong/recurrent FCF then this may be the candidate for further investigation.
I apply the FCF yield, trailing FCF divide by price, on some of my core stocks and this is the result:-
FCF Yield %
Valuetroics 17.9
UMS Holdings 13.3
Design Studio 18.1
Hock Lian Seng 53.8
Isoteam 16.7
Best World 14.2
Mfg Integration 15.2
Innovalues 6.9
GL Limited 5.6
Please note that some businesses are cyclical and this factor should be taken into account in your analysis.
