Tag: Free cash flow
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Three engines, and the people driving them
The Quality Series · part 8 of 13 Free cash flow per share can compound in three ways. The first is to grow the cash flow itself. This is the classic compounder — a durable moat, high returns on capital, real pricing power — allowing it to compound earnings and cash flow per share at…
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Where stock returns actually come from
The Quality Series · part 4 of 13 The return from owning a share comes from the growth in free cash flow per share, from a change in the multiple the market is willing to pay for that cash flow, or from a combination of the two. That is all. Everything else — the narrative,…
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From great business to great investment
The Quality Series · part 3 of 13 Why does linearity matter? Because it is the first link in a chain. A great business and a great investment are not the same thing, and the journey from one to the other has five links. I think about them in this order. Linearity. A world-class business…
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Same five years, very different businesses
The Quality Series · part 2 of 13 Here is a comparison I keep coming back to. Two companies each take their free cash flow per share from one to two over five years. Same starting point, same end point, same growth on paper. The first gets there steadily, a little more each year. The…