The free cash flow yield, or a company’s free cash flow divided by market capitalization, provides a strong indicator of balance sheet strength and a company’s current cash flow positions. Typically, investors would want to look for companies with high cash flow percentage, which reflects higher cash flow with the same underlying valuation.
Incidentally, 57 of TTFS’s holdings have been acquisitions targets, which helped bolstered overall returns. The interest suggests that buyers enjoy acquiring firms with tidy balance sheets. On average, 1.3 TTFS holdings per month have been acquired since the ETF launched. [Looking for International Cash Generators? This ETF Has Them]
Corporate America has been holding on to cash in the years following the financial crisis and have recently put that money to work through shareholder-friendly programs, like dividends and buybacks, which have helped fuel the multi-year rally and supported valuations through reducing open shares. By some estimates, buybacks among S&P 500 member companies could reach a record this year. [A Selective Approach to Buyback ETFs]
TrimTabs Float Shrink ETF
