@yuvaltaylor, in your article "How to Predict a Stock’s Growth" from 2021, you mentioned that ratios measuring FCF in the recent past were negative indicators for future FCF growth.
In my multifactor ranking system, one of my nodes is a Free Cash Flow TTM growth formula that compares the trailing 12-month Free Cash Flow to the previous trailing 12-month Free Cash Flow. Do I understand you correctly that, based on your findings, you would recommend using this factor in a counterintuitive way, with lower numbers being better?
I'm not really sure. I don't think it would be very reliable.
Thanks for your answer. Since you are not sure if there is any reliable negative correlation between Free cash Flow TTM growth and future free cash flow growth, what conclusion would you draw?
Would you then tend to continue using "Free Cash Flow TTM Growth" factor in the traditional way, with higher numbers being better, or do you think that this factor in general has only weak or very unreliable predictive power and should therefore be dropped from a ranking system altogether?
Yes, I use fcfgr%ttm in the conventional manner. I use a few other free cash flow growth factors as well.
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