In This Issue:
Last Chance for Our Toolkit 6/Stock Prospector Special Offer
Only three more weeks are remaining on our special offer for new users of Toolkit 6, the world's most popular software for stock analysis, to get a copy of Stock Prospector with their purchase at no additional charge.
Here are the details. Through April 30, 2011, if you purchase Toolkit 6 only through this special offer, ICLUBcentral will give you a copy of our Stock Prospector screening software. Stock Prospector is a $69.99 value and works with your StockCentral or BetterInvesting data subscription to help you find top candidates for your stock portfolio.
This offer is only available in the ICLUB store or by calling us at 1-877-33-ICLUB. Be sure to act before the deadline to receive your copy of the powerful Stock Prospector program with your purchase. Purchase Toolkit 6 and Stock Prospector today — this offer is not likely to be repeated!
Analyze Free Cash Flow in Toolkit 6
by Doug Gerlach
With the release of BetterInvesting's and StockCentral's upgraded data services earlier this year, users of Toolkit 6 now have access to historical free cash flow per share when analyzing a stock. Previously, we offered cash flow per share for the past decade of a company's history in the data service, but we switched to free cash flow per share in our recent data enhancements.
Free cash flow removes any capital expenditures from the cash flow figures and is preferred by many investors when evaluating a company's financial statements. Here are Morningstar's definitions of the underlying data points in the calculation of free cash flow:
Free Cash Flow = Operating Cash Flow - Capital Expenditures
Operating Cash Flow: The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities include all transactions and events that are not defined as investing or financing activities. Operating activities generally involve producing and delivering goods and providing services. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income.
Capital Expenditures: Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations. Capital expenditures are generally depreciated or depleted over their useful life, as distinguished from repairs, which are subtracted from the income of the current year.
From the Visual Analysis screen in Toolkit 6, you can turn on the historical free cash flow per share data series by clicking in the Additional Items box in the upper left corner of the screen. Note that the program still refers to "cash flow," although the data now provided by the StockCentral and BetterInvesting data services have changed to use free cash per share in these fields.
One simple way to include a review of free cash flow in your stock study is to compare the growth of free cash flow to earnings per share. This can help ensure that a company's EPS growth is indeed supported by cash coming into the business and not by accounting adjustments or other factors.
I'm sure this change will be welcomed by our users, and hope that you will all take advantage of the additional analysis provided by the inclusion of free cash flow in the data service.
Do You Like Your Toolkit 6?
Perhaps the easiest way to follow all that's going on related to Toolkit 6 is to join the Toolkit 6 Facebook page. All you have to do is visit the page while you are logged in to your Facebook page and press the "Like" butto. You'll then receive updates in your Facebook stream along with all the updates from your family and friends.
From webinars to articles to special offers to tips, the Toolkit 6 Facebook page has plenty of resources to help you get familiar with all that the program has to offer.
In addition, you can post your own comments, feedback, and questions on the Facebook wall for our staff to review. So go ahead, and Like Toolkit 6 today!
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