Posted by Ricky Yeo > 2017-10-01 05:55 | Report Abuse

Leaving price aside, positive cash flow in any of the past year has little determining factor on the quality of management and business. A company with poor cash flow or FCF can be the result of poor management, or the dynamic of the industry or perhaps, the company reinvest large amount in capex and working capital with the expectation of generating great future return/cash flow. This is often the case for growing companies and possibly the case for cyclical industry i.e construction, property development

The market is forward looking as well. If market has reasonable expectation that a company with past 10 years negative cash flow can generate a large positive cash flow in future and over its entire lifetime, it will receive high valuation i.e Amazon, Uber or other venture capitalist businesses.

Profit and Cash flow will come to be more or less the same over the long term. And while cash flow is a shorthand to judge or value a business, what matters is the return on capital - that is how much can be generated for every dollar reinvested into the business. If a business can achieve high compounded return for the foreseeable future at the cost of negative cash flow, that is a great news.

Posted by yfchong > 2017-10-01 07:27 | Report Abuse

thks sharing bro ricky..

Posted by signor > 2017-10-01 08:37 | Report Abuse

ricky bro, "If a business can achieve high compounded return for the foreseeable future at the cost of negative cash flow, that is a great news." - how to spot this kind of business? based on experience? or business sense? or start to jump in only after seeing the cash flow turn positive?

Posted by RainT > 2017-10-01 12:04 | Report Abuse

GADANG and GKENT is good shares la

Just they do shar split so share price adjusted to down