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25 October 2019
By Maynard Paton
Studying free cash conversion is vital when evaluating a set of accounts.
The measure compares free cash flow to reported earnings, and can indicate whether a business is a ‘cash fountain’ or a ‘cash guzzler’.
Ideally we want to own companies that generate plenty of spare cash, because such cash can:
- Underpin accounting profits;
- Indicate an attractive business, and;
- Fund welcome dividends.
By employing SharePad, I identified Rightmove as an elite cash producer.
Read my full Rightmove article for SharePad.
1 thought on “[SharePad] Screening For My Next Long-Term Winner: Rightmove”
Exactly a near monopoly at present makes it a great business but will the status quo remain, does it ever. At that point there is no diversification.
Auto trader has some similarities.
Interesting that Smithson has a stake although not altogether suprising given the cash conversion margins and ROCE they hold dear.
As a rightmove shareholder Id personally like to see gradual steps to future proof the business and become less reliant on a limited pool of customers, with other essentials such as software or more in data and analytics.