Take 5 Stocks – FCF ROE ROIC are five monthly picks of AAII’s Price-to-Free Cash Flow Stocks (http://www.aaii.com/stock-screens/screendata/PricetoFreeCashFlow). We added some additional criteria to the screen such as ROE > 20% and ROIC > 20%.
It is hard to buy all the stocks from this improved screen so we cherry pick some of the best stocks based on 1) Sales Growth, 2) Sales Predictability, 3) Earnings Projections, and 4) PE Multiple expansion. Basically, we utilize a simplified Better Investing (www.betterinvesting.org) methodology and apply it to the list of Improved AAII’s Price-to-Free Cash Flow Stocks.
The five stocks and our analysis based on Better Investing’s methodology are:
- Lululemon Athletic LULU
- Medifast Inc MED
- SolarWinds Inc SWI
- Strayer Education STRA