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How to select the best cash cows

Didier Rabattu, Head of Equities at Lombard Odier IM, explains what aspects he takes into account when looking for the best cash-generating companies.


When looking for companies that produce the highest possible amount of cash, there are three important aspects to focus on, explains Rabattu.

  1. Look for companies which are generating the highest return on capital employed or equity among their peer-group
  2. Select the companies that are generating the highest amounts of maintenance-free cash flow
  3. Buy those companies that do not depend on external capital.

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