According to @QCompounding, Free Cash Flow Yield is calculated as free cash flow per share divided by stock price, and a higher FCF yield typically signals a cheaper stock valuation. Source: @QCompounding on X. Traders generally derive free cash flow per share from trailing 12-month free cash flow, defined as cash from operations minus capital expenditures, divided by weighted average diluted shares, which standardizes comparisons across companies for valuation screens. Sources: U.S. SEC Investor.gov, Investopedia. They then compare a stock’s FCF yield to sector or peer medians to identify relative value and rank candidates in screening workflows. Source: Investopedia.

According to @QCompounding, focusing on Owner's Earnings removes the distraction of short-term market swings and highlights true long-term profitability for clearer trade decisions, source: @QCompounding tweet dated 2025-08-26. Owner's Earnings is described by Warren Buffett as reported earnings plus depreciation and other non-cash charges minus the average annual maintenance capital expenditures required to maintain competitive position and unit volume, representing distributable cash, source: Berkshire Hathaway 1986 Shareholder Letter. Using Owner's Earnings rather than volatile GAAP net income can stabilize valuation multiples and improve entry and exit timing in cyclical sectors by anchoring on cash-based profitability, source: @QCompounding tweet dated 2025-08-26 and Berkshire Hathaway 1986 Shareholder Letter. Practically, traders can reconcile cash flow statements and capex disclosures in Form 10-K and Form 10-Q to estimate Owner's Earnings and test the sustainability of dividends and buybacks during drawdowns, source: SEC Form 10-K and Form 10-Q reporting requirements and Berkshire Hathaway 1986 Shareholder Letter.