Free cash flow is a critical financial metric that offers a more transparent view of a company's profitability in the context of equity valuation. Historically, both free cash flow profitability and free cash flow yield have demonstrated strong predictive capabi...
Pure Alpha II: A Framework for Active Manager Evaluation
This paper extends our previous research, starts with revisiting a two-dimensional framework for measuring active management using active shares and tracking errors. The limitations of the traditional framework are discussed and a new dimension, the pure alpha estimate, i...
Exploring Expected Returns: Insights from the Alternative Three-Factor Model
Investors are always seeking to unravel the drivers that underlie equity price and stock performance. Several models have been developed over time trying to solve the puzzle. The Capital Asset Pricing Model (CAPM) published by Sharpe (1964) and Lintner (1965), and...