In today’s briefing:
- A Market with a Low Average ROE Favors Valuations for Companies with More Reliable Cash Flow
A Market with a Low Average ROE Favors Valuations for Companies with More Reliable Cash Flow
- Since the ROE has been hovering around the 9% ceiling, the challenge is that few companies could present future outlook convincing enough to raise expectations of sustainable ROE growth.
- Since stable BPS has higher correlation with TOPIX than EPS, investors trust a company that accumulates cash flow in shareholders’ equity to sustainably increase profits than to temporarily increase profits.
- Since it’s been confirmed that Tobin’s Q of companies with more cash on hand is higher, the stock valuations of companies with higher cash flow margins tend to be higher.
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