Which of the following factor combination is best for selecting a stock that is likely to outperform?
Low Earnings Yield, High Volatility & Low Free Cash Flow to EV |
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High Earnings Yield, Low Volatility & Low Free Cash Flow to EV |
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Low Earnings Yield, Low Volatility & Low Free Cash Flow to EV |
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High Earnings Yield, High Volatility & High Free Cash Flow to EV |
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High Earnings Yield, Low Volatility, & High Free Cash Flow to EV |
Which of the following Bloomberg functions are all Relative Valuation Methods
ANR. Discounted Cash Flow, DDM |
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RV. PEBD, DDM |
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RV. EQRV, PEBD |
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RV. EQRV, DDM |
High Earnings Yield, Low Volatility, & High Free Cash Flow to EV.
This is best combination.
A high earnings yield signifies that earnings are high relative the market price. This also means that the PE ratio is low, since the earnings yield is the reciprocal of the PE ratio.
A high free cash flow signifies a health business, with adequate funds available for reinvestment and distribution.
Low volatility signifies that the risk is low.
Hence, this is the best combination.
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