In today’s briefing:
- Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct
Cash Flow Return Is Necessary Condition for Higher Stock Valuations; Shareholder Return Is Byproduct
- The most important factor in increasing stock valuations is overseas investors, and a clue can be found in exploring what kind of companies they tend to invest in.
- It is a company with high cash holdings and a high growth policy score, i.e., a company that generates ample cash flow. This should be considered a necessary condition.
- As foreign ownership increases, shareholder returns such as share buybacks will also be implemented to review cash allocations and improve board practices, so these can be considered byproducts.
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