What companies can you find that are selling for below their sticker price? Leave a comment below with your answer. Are you busy but want to learn more about investing? Listen to my podcast on your commute to work or while you're home making dinner! Click here for my top 10 best episodes: bit.ly/2ngdFsz

Between 2009-2011 i purchased for cash 10 residential rental properties for around $10,000 each. Fixed them up and have been renting them for $795-$850 for the past 10 years. They paid themselves off in 1.5 years. They are cash flowing machines. Now their value is between 60k and 110k each. Now i have been using that money to fuel my stocks portfolio which has increased to 250k over last 2 years. I love my 100% gainers! I never touch a penny of that money i just keep rolling it over to the next value stock that i did my research on. I only sell after my stocks go up minimum 100%. My home is paid for and my monthly expenses are $950. I live very frugal, though i dont have to. I have more fun saving and investing than i do spending money. All this and i still drive my 1998 ford escort that i bought 11 years ago for $2500. I use to work 50-60 hours a week in a cabinet shop for 10 years but now with realestate i have my life back and i am no longer trading my life for money. The 2009 realestate crash created alot of net worth for alot of people who were hungry for it. My story is just one of many! I am thankful to have a story to tell. When eveyone was calling me "stupid" and "why do you want to buy realestate the market is crashing youll lose everything!" I went with my gut knowing i could fix up that property and find a good tennant. I started with one property and kept on going. Now those same people today are telling me they wished they would have invested when i did. So now they are still stuck in their 9-5 and hate it. I told everyone that now is the time to buy but i guess i was the "stupid" one! lol Do i dare say, "I'm looking forward to the next market crash!" Im living proof that's how small fortunes are made! Live frugal and keep investing and rolling that money over.

This is great thank you so much for your help and I love hearing you and Danielle banter you sounds like such a loving family!!!

Thanks for all you do Phil ! I hope you feel better.praying , you have a speedy recovery.

Thanks for sharing this. It really helps me get a better grasp of determining when to buy. According to this I have made both good and bad decisions in the pasr.

Finally, a simple answer to a question I have been pondering, thats why I love your explanations. They are simple and easy to follow. Thanks again.

Phil, after reading your book Rule One Investing book, Investing in the stock market is the best thing ever invented. After watching this video and after reaching my own conclusions, real estate is the second best way to make money and become wealthy. It will be wonderful if you could write a book on real estate just like you approach stocks. Teach us how to determine the growth rate, the sticker price, etc. Thank you 🙏

Great refresher, Thanks for your time.

Hi Phil. Really great and simple explanation. Thank you for keeping educating us. I think there is a misspoke at 7:29. I think you meant maintenance capital cost $1000 per year, not per month. Correct?

Now...this is what I call a tip or a best advice ..thank you !

Excited to know, can't wait for tomorrow

Great video Phil, love the simplicity! thank you

Bank stocks according to the DCF calculator are significantly undervalued. Most of them including JPM, BAC, and WFC are well over 10 cap. And with a recession most likely occurring in the next 2-3 years, i think it would be wise to slowly buy until then. And once it drops, pour money in like there’s no tomorrow. HD is also a play at this price point

This is one of the best videos in my opinion. Because my goal is individual stock investment first and then Real Estate investment. I just learned more from you yet again. Thank you Phil! God bless!

Thank you, Mr Town!

Great video! Thanks

Very valuable thank you!

Abercrombie is sitting at a POE of 7.2. faces a few challenges, but nothing I think they can't handle, otherwise a healthy business. probably going to add it to my portfolio this Monday, hopefully, the price drops a little more over the weekend ;) Morgan Stanley POE is 2.5. Their financials ain't too good, and they haven't been doing so well despite the bull market. I'm worried they might tank doing the coming recession, but it got some juicy value. Etrade is sitting at 6.7. Havn't looked much into them, have a lot A LOT! of liabilities, but I suspect these are mostly from the leverage used on their platform. NN group sitting at 6.2. Got negative free cash flow, and negative operating cash flow, but it sure is cheap. And last but not least Peugeot trading at POE of 5.6 havn't looked into them, but unlike NN group they actually look a lot healthier. Any thoughts on the above companies?

I like this video with your in depth look at a *Ten Cap*

Thanks Phil, great educational tool

THANKS UNCLE PHIL

Hi, Phil! Great information. I love your channel! What do you think about this book: Tom West - The essential guide to pricing businesses and franchises? 2019 edition

Thanks Phil.

*Altria (MO) fits this criteria.* Free Cash Flow is $8.15B. x10 = $81.5B. Current market cap is $75.1B! MO is at excellent value and this is just another method that proves it :) Other examples are ABBV, ETFC

Yeah, I'm from Vancouver, Canada, and I had a good, long chuckle at this.

It is great to find this kind of bargains. But with time and nowadays this gets really really hard!

Thanks for this great short cut Phil :) If you look at GrafTech International (EAF) - it's priced even better than a 10 cap right now.

Excellent Video! Should we look at the Free Cash Flow or the Levered Free Cash Flow?

​Everything is so expensive right now. I will be patience and keep making a wish list of wonderful businesses.

Great Video, to determine the buy price, is it better to use the calculated margin of safety price from valuation or the ten cap price? Should you still buy if price is trading at margin of safety price, but less the 10% earnings yield, (ten cap)? Thanks

To my understanding if the free cash flow times 10 is equal to the market cap of the business it's fair value. If the market cap is significantly LESS than free cash flow times 10 it's a discount. So using this method ( and factoring in many other things ) Fiat Chrysler, TEVA and Micron Technology are the best buys right now

Hi Phil, It’s hard now, but yes I find for example the jewelry producer Pandora (ticker Pandy) Price-to-Owner-Earnings/Pandora-AS and free cash flow 4-5!

This video is awesome.

I enjoy your presentation .

Great video Phil! I'm looking forward to the next recession so I can pick up some great stocks for a bargain!

Loved the video Phil

I would lov to buy my existing holdings at half price off

Awesome explanation! but Which year's free cash flow should I look at? the recently issued or the previous ones??

Man , you do a great job with investment education ...Align is on sale according to MOS

Hi. Phil,what about in leveraged scenarios where there is a mortgage. Wouldn’t you Subtract the mortgage interest and then have the owners earnings.

You're a great guy Mr. Phil

You are wonderful

Thank you phill for this video I have a question I would like to ask you which is how can i know if a company will grow in 10years

Do you subtract the mortgage interest in the calculation?

I a Have a few CEFs that are selling at a good discount to Nav that are giving a close to 10% yeild off of earnings. Wouldnt this qualify as a 10 cap especially if their market price and nav are growing over time?

Hi I'm your massive follower of yours. Could u please make a video on brexit, as in how will stock market will be effected if the brexit is done.

Excellent video. You have just got another subscriber. One question, do you have a video explaining what to pay for a certain share of stock at a given moment. Sorry, but I think it's called an intrinsic value. How to calculate it? Let's say PayPal sells right now at $137 and I wanted to find out what is the real price value plus margin of safety, how to calculate this? Thanks in advance

Building up cash right now and waiting for a sale

If I understand your explanation correctly ... it sounds like you recommend not to buy stock with P/E ratio > 10.0x ... please let me know if I misunderstand it.

For me right now. I do not quite understand this method. What I do is a list of companies shares and I look if the value did go down. I never buy a share, unless the value is down. Since the market always recover. If they go down 4%. I just did 4%. Why it is so complicated to understand? I buy shares of great companies. But If I would think that one day they would close. I would never buy one share.

Hi Phil, I was wondering, when looking out for FCF I come across the terms levered and unlevered FCF. I suppose that Levered Free Cash Flow is the same as the FCF that you refer to in your movie is it not?

Hi Phil. I have been looking at a TON of companies lately. Off the top of my head, I found B&G Foods (BGS) to be selling today, below a ten cap rate. Free cash is 167m. Outstanding shares is 65m. When i do the math, I get 25 per share. It is currently selling at 16/share. Growth rates look fantastic as well in rev, net income, eps and equity. What do you think?

Thank you Phil. That's exactly the way I think. I will keep thinking the way I think

必须点赞。 have to give a trumb up.

Can you do an example where you take a company, find out its free cash flow, and show how much we should pay for it? I just did it for VRSK. Looked up its Balance Sheet and Statement of Cash flow on SEC. Its operating cash flow was 956.3 mil. Minus Capital Expenditure of 216.8 mil gave me a free cash flow of 639.5 mil. Dividing by outstanding 163076000 shares gave me 3.9. Times ten would be $39. Does this seems to be the correct price to pay for VRSK? Right now, VRSK is trading for $148.

new follower here. I look forward to attending an event in Atlanta

So do you divide the 10 cap # by the number of shares outstanding to find the purchase price?

Phil energy stocks on sale and when travel gets back to where it was (( cruises ,Airlines, etc ) fuel will continue to go up !!, Stock SHLX pays 16.43 percent dividend and PE of 8.67 With eps of 1.29 off one year high of $22.00 from March of 2020 its a long position Down side Electric vehicles and green energy . What’s your thoughts ?

should i subtract the company's debt from the cash flow ?

What about taxes on real estate? You didn't include it in your equation?

So wait we take the free cash flow of the business and x 10 and if that's more than the market cap on the company is that a buy?

Kinda hard when everyone thing the same! 😔😔😔.. . Can't beat financial AI for sure!

An example with an actual stock would have been helpful, even if it failed the 10x test. Maybe I missed it, what figure are we supposed to be looking at to compare the 10x number to? Also, how might you use this tool to see if past purchases were “worth it”?

Altria $MO

Altria maybe

Mr Phil do you think Boeing is on sale right now?

I checked the statement of cash flows for a few large companies after watching this and was not able to locate "operating cash flow" or "purchase of property and equipment" is it possible they could be worded slightly differently? How else might these be phrased on a company's statement of cash flows? Thanks!

Mr. Phil, Has anybody ever told you, you look like Jamie lannister from game of thrones.

question for the people: what do you think about Phil Town's Rule #1 Investing? Didn't follow him that much but I am looking for more investing/financial adjudication. I am aware of basic things like money flow, assets, liability etc. I am 25 and want to start with investing. It seems there is a lot of people giving advice on investing. Should I follow this channel? Does content on this channel apply worldwide? Thank you

What does 'buying at ten cap price' mean? The market cap matches the ten cap price?

I'm a young new investor and I just want to clarify, when you say multiply the company's free cash flow by ten and that's the price you should buy how does that work? quick example: company has 1 Million dollars in free cash flow, times 10 gets 10 million dollars. so what do I do with this 10 million dollar value? am I doing the calculation right? am I even calculating with the correct numbers? Any explanation is appreciated!

Actually my client told me to purchase shares in shopify when it was at $300 a share... not it is at $1000 a share.... guess I screwed up slightly haha

BAC free cash flow per share is $0.88, $0.88 x 10 = $8.8/share. Buffet bought BAC shares at a price three times that. What am I doing wrong?

I found one but there was not many

Hi. So when I look at the "free cash flow" line of a company's cash flow statement in their financials, the number is in the millions or billions. I don't understand what you mean by "multiply by ten" to decide if it's a good deal. There must be some other factor to divide this number by.

I dont understand the 10% rule...Can someone explain it in detail please

Quickest way to this is price/fcf metrics.

FCAU, SIG, GIII are selling pretty well and are good companies, up to me, off course.

Argh, these premieres always get me. Alright then, see you tomorrow.

Please help what is the formula? is it.. free cashflow *10 / Amount of shares = price you should pay?

Aaaaand how do we know if we should trust the management team??

Its good if you can show how the calculation is happening - simply using a white board... Thank you

Half off is great. That's almost 50 percent!

Do you mean by FCF is net income x 10 = market cap?

Hi Phil, what's your take on building a Ray Dalio like all weather portfolio now for me as a newbie given the looming recession. I have 10 to 15k to invest now. Love your videos. Thanks

10 times rule doesn’t make sense to me. I live in small city in TX and you need 15-20 times net earnings. I cant even imagine in big cities.

Phil, any chance of a worked example for us numpties?

Anyone else looking at amtd?

What is up,phil? i have a question. Is the ten cap method can be applied to any stock market around the world? especially an emerging market stock?

For sure he's Warren Buffett's disciple, revealing his top secrets. Have to say I love Phil. To the question at the end: It's Mar 19,2020 now. After 3 routs in a couple of weeks and the sharpest plunge of the markets, there're plenty of ten caps. For example STOR gets $458 Million FCF, $4.16 Billion Market Cap. Enjoy the gold shower, Phil.

Where is the best place to find current FCF?

But what about banks they seem to have negative cashflows🤔???

Nothing is really on sale right now to 10X your returns. Keep building up your cash or at least invest in dividends. 😉

Does Phil ever recommend a stock or helps analyzing one?

Verizon (granted its debt is high). Burford (litigation finance company due to it's counter cyclical nature of business)

I have a python script that will calculate the intrinsic value, ten cap and payback time price at 15% for a list of tickets I give it. The only stocks close to a ten cap are cyclical stocks like AMD or MU. Problem is that value is calculated using a FCF value that fluctuates with great volatility and is difficult to price accurately. That said, 3M and FedEx are getting close to their ten cap and I am watching closely as those are wonderful companies that have stood the brunt of many tough business cycles. Kohl’s is getting closer to its ten cap but like the semiconductor companies, FCF is probably inflated with consumers doing very well right now.

I know I’m a little late but I did this math with CVS today and I got 99. It’s currently trading at 65. It seems too good to be true. Did I do the math wrong?

I don't understand. 'That's the price you should pay' if 10x free cash flow equals what? The market capital?

Is he talking about earnings per share?

What about picking a stock that has below 10 P/E ratio. Much easier right?