We live in a yield-obsessed era.
Whether it's dividend yields, junk bond yields or lowly government bond yields, investors seek yields in every corner of the market.
But many overlook the most important type: free cash flow yield. It's a simple yet powerful measure that points to the market's top bargains. And you should measure each stock in your portfolio against this underappreciated metric.
You can figure out this yield by identifying a company's annual free cash flow (which is its operating cash flow minus its capital spending) and dividing it by the company's market value. For example, a company with $50 million in free cash flow and a $1 billion market value has a 5% free cash flow (FCF) yield ($50 million/$1 billion).
Most companies in the S&P 400 (a mid-cap index), S&P 500 and S&P 600 (small caps) have FCF yields below that 5% threshold, yet any time you see a figure that's higher, it's a certifiable value. In recent years, I've cited Wal-Mart Stores (NYSE: WMT) as an example of a compelling FCF yield. The giant retailer has stumbled during the past half-decade, but whenever its stock falls out of favor, value investors have swooped in and purchased, thanks to that solid FCF yield.
5 Best Small Cap Stocks To Own Right Now: FuelCell Energy Inc.(FCEL)
FuelCell Energy, Inc., together with its subsidiaries, engages in the development, manufacturing, and sale of high temperature fuel cells for clean electric power generation primarily in South Korea, the United States, Germany, Canada, and Japan. The company offers proprietary carbonate Direct FuelCell Power Plants that electrochemically produce electricity from hydrocarbon fuels, such as natural gas and biogas. Its fuel cells operate on a range of hydrocarbon fuels, including natural gas, renewable biogas, propane, methanol, coal gas, and coal mine methane. The company also develops carbonate fuel cells, planar solid oxide fuel cell technology, and other fuel cell technologies. It provides its products to universities; manufacturers; mission critical institutions, such as correction facilities and government installations; hotels; and natural gas letdown stations, as well as to customers who use renewable biogas for fuel, including municipal water treatment facilities, br eweries, and food processors. The company was founded in 1969 and is headquartered in Danbury, Connecticut.
Advisors' Opinion:- [By SmallCap Investor]
The developer of stationary fuel cells used by commercial and government customers might be headed for a rebound from a pullback that began this spring - which has left the stock down 39 percent year-to-date.
- [By Roberto Pedone]
Fuelcell Energy (FCEL) designs, manufactures, sells, installs and services ultra-clean, highly efficient stationary fuel cell power plants for distributed baseload power generation. This stock is trading up 7.2% to $1.01 in recent trading.
Today’s Range: $0.94-$1.01
52-Week Range: $0.83-$1.95
Volume: 1.27 million
Three-Month Average Volume: 1.04 million
From a technical perspective, FCEL is ripping higher here right above its 50-day moving average of 92 cents per share with above-average volume. This move is quickly pushing shares of FCEL within range of triggering a near-term breakout trade. That trade will hit if FCEL manages to take out its 200-day moving average at $1.05 and then once it takes out more overhead resistance at $1.06 with high volume.
Traders should now look for long-biased trades in FCEL as long as it’s trending above its 50-day at 92 cents per share, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.04 million shares. If that breakout hits soon, then FCEL will set up to re-test or possibly take out its next major overhead resistance level at $1.18. Any high-volume move above $1.18 will then put $1.39 into range for shares of FCEL.
5 Best Small Cap Stocks To Own Right Now: Sky-mobi Limited(MOBI)
Sky-mobi Limited engages in the operation of a mobile application store in the People?s Republic of China. It works with handset companies to pre-install its Maopao mobile application store on handsets and with content developers to provide users with applications and content titles. The users of its Maopao store could browse, download, and purchase a range of applications and content, such as single-player games, mobile music, and books. The company?s Maopao store enables mobile applications and content to be downloaded and run on various mobile handsets with hardware and operating system configurations. It also operates a mobile social network community, the Maopao Community, where it offers localized mobile social games, as well as applications and content with social network functions to its registered members. The company owns proprietary mobile application technology in the cloud computing, the MRP format, and SDK development environment. As of March 31, 2011, it had entered into cooperation agreements with approximately 523 handset companies to pre-install Maopao. The company was formerly known as Profit Star Limited and changed its name to Sky-Mobi Limited in October 2010. Sky-mobi Limited was incorporated in 2007 and is headquartered in Hangzhou, China.
Advisors' Opinion:- [By Wyatt Research Staff]
MOBI hit another 52-week high of $12.15 late last week. The stock continues to surge on increasing volume. The latest advance in share price came after Oppenheimer upgraded the stock to "Outperform".
Last week, the China-based internet portal and gaming provider giant Sohu.com (Nasdaq: SOHU), announced an advertising agreement with MOBI.
Hot Penny Stocks To Buy For 2014: ATA Inc.(ATAI)
ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.
Advisors' Opinion:- [By Wyatt Research Staff]
The Chinese-based educator spiked higher recently after it exceeded analysts' expectations. Revenue and adjusted earnings soared 78% and 269%, respectively. Its long-term annual growth rate is 15%.
Analysts at Zacks Investment Research upgraded shares from "neutral" to "outperform".
5 Best Small Cap Stocks To Own Right Now: OmniVision Technologies Inc.(OVTI)
OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.
Advisors' Opinion:- [By Karim]
They make the 5-megapixel sensors in the camera of every iPhone. Along with this they carry a strong balance sheet and upbeat earnings expectations boding well for future growth.
5 Best Small Cap Stocks To Own Right Now: bebe stores inc.(BEBE)
bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.
Advisors' Opinion:- [By CRWE]
bebe stores, inc. (Nasdaq:BEBE) reported that its Board of Directors declared bebe�� quarterly cash dividend of $0.025 per share. The dividend is payable on December 4, 2012 to shareholders of record at the close of business on November 20, 2012
- [By Wyatt Research]
The women's apparel retailer reported fiscal fourth-quarter sales and same-store sales both rose 7 percent. The stock is up 30 percent year-to-date.
No comments:
Post a Comment