Individual valuation ratios have various limitations, however, so there are benefits to using more than one.
Not exact matches
Valuation Price - to - Cash Flow: Price - to - cash - flow (P / C)
ratio is the average price to cash flow
ratio of the
individual stocks within a fund.
The most reliable measures of
individual stock
valuation we've found are based on formal discounted cash flow considerations, but among publicly - available measures we've evaluated, price / revenue
ratios are better correlated with actual subsequent returns than price / earnings
ratios (though normalized profit margins and other factors are obviously necessary to make cross-sectional comparisons).
Individual issues in the Fund typically sell at reasonable
valuation levels and are supported by above - average corporate profitability, accelerating earnings growth and low debt / equity
ratios.