Converging networks: looking ahead to 2020E cash flow growth

Canadian Market Summary

Written by Iconic Group
June 26, 2018

As we approach the halfway mark of 2018, we begin to shift our relative stock-picking screen to include 2020 estimates in our cash EBIT (EBITDA less capex) growth versus EV/cash EBIT analysis. Based on historical performance, this has been a good screen for finding relative outperformance in the group. In summary, stocks with higher cash EBIT growth tend to outperform those with lower growth historically over 12-month, 18- month, and 24-month periods. In this edition of Converging Networks, we update our analysis to include 2020 estimates and discuss which stocks we believe are more likely to outperform over the next 12 to 24 months.