Distinguishing Free Cash Flow Quality
Traditional quality strategies based on measures like return on equity, debt to capital, and earnings variability have a few significant drawbacks.
The TrimTabs Free Cash Flow Quality Factor Model offers a better quality investing solution that aims to generate consistent alpha through the economic cycle.
Propritary Free Cash Flow Quality Factor Model
The Free Cash Flow Quality Factor Model is a unique combination of quality measures informed by TrimTabs proprietary research. Stocks selected by the multi-factor model have strong and sustainable profitability, delivering consistent excess returns over the broad market index.
Free Cash Flow Profitability
Free Cash Flow is a superior current profitability indicator compared to earnings when it comes to quality investing
Quality of Earnings
Accrual information predicts future profitability and the cross-section of stock return. Free Cash Flow mitigates the risk from non-profitable companies with low accruals and thus improving the predictive power
Cash Flow-Based Financial Strength
Cash Flow-based measures in leverage, coverage and long-term growth help evaluate financial strength of a company better than other measures How TrimTabs Free Cash Flow Investing Works in 60s