Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. When companies have ratios of levered free cash flow/enterprise value in excess of 10%, it may indicate that the company as a whole is being undervalued.
LINK:http://seekingalpha.com/article/768211-3-highly-shorted-basic-materials-stocks-undervalued-by-levered-free-cash-flows
3 Highly Shorted Basic Materials Stocks Undervalued By Levered Free Cash Flows - Seeking Alpha
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