Video: Price to Cash Flow

I am always looking for new ways to evaluate potential investment possibilities.

I think I ran across one that I will check in more detail. At my first glace, it looks like it might be pretty good.

A lot of people rely on the Price/Earnings ratio, but this video shows an approach that relies on the Price per Cash Flow (Price/Cash Flow) metric instead.

Price/Cash Flow compares the stock price/share (market value/share) to the amount of cash flow/share.

We know that cash is VITAL for a company to maintain its operations. Plus, the price/cash flow is more difficult to manipulate "for the books" than the more popular price/earnings and many other measurements are.

Here is a video with Kevin Matras and Terry Ruffolo from Zacks.com that explains the scanning technique a little better:

Price per Earnings (P/E): Is it useful?

Investing in the stock market can be tricky, and it really is for a lot of people. Many people think there is some witchcraft or higher power involved that will never let them have any chance of understanding it.

How many people develop ways to “beat” the stock market? Honestly, you never will beat it. You just hope that you’re on the right side of the fight and pick the winner (or loser) correctly.

A lot of people try to offer different ideas, and some seem to make a lot of sense. (Some do not; at least, not to me.)

One thing that many investors check is the Price per Earnings (P/E) figure. In fact, this is one of the most popular ratios (comparisons) used when evaluating a stock.

Is it the best?