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Goldman: Misleading Accounting Makes Free Cash Flow Yield Irrelevant

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Rupert Hargreaves
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Updated on

The S&P 500 may look expensive on most traditional valuation metrics, however, according to Goldman Sachs due to a record low level of capital spending; the index appears attractive when valued on free cash flow yield.

Indeed, according to a recent research report from the investment bank, capital expenditure as a percentage of cash flow from operations ranks in just the fifth historical percentile since 1990.

The report goes on to...

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Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk