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There's a sort of common strategy that uses EV / FCF (or something like that) as a metric for cheapness and ROIC as a metric for "good" businesses (to avoid val
by aaavl2821 8y ago
There's a sort of common strategy that uses EV / FCF (or something like that) as a metric for cheapness and ROIC as a metric for "good" businesses (to avoid value traps). I believe it has done pretty well
- acconrad 8y agoIt's the Magic Formula (EV/EBIT and ROIC) and it has not always performed well: https://seekingalpha.com/article/4116677-greenblatts-magic-wand-must-broken-year-magic-formula-large-midcap-update-2017-ytd https://seekingalpha.com/article/4116677-greenblatts-magic-w...