Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.

Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.

Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?

You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.

If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.

Home / Markets / Industries / Technology

Tuesday, July 01, 2008

Next Inning Technology Announces Investment Opinion, Updates Outlooks for Anadigics, Skyworks Solutions, RF Micro Devices, Cree, and OmniVision Technologies

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PRINCETON, N.J., Jul 01, 2008 (BUSINESS WIRE) ----Next Inning Technology Research (http://www.nextinning.com), a subscription service focused on semiconductor and technology stocks, announced it has updated outlooks for Anadigics (Nasdaq: ANAD), Skyworks Solutions (Nasdaq: SWKS), RF Micro Devices (Nasdaq: RFMD), Cree (Nasdaq: CREE), and OmniVision Technologies (Nasdaq: OVTI).

In a series of reports released in March, Editor Paul McWilliams advised readers it was time to buy specific tech stocks. All of his selections went up significantly with some nearly doubling. Realizing the highs we were seeing in mid-May were unlikely to hold, McWilliams released a special report as the markets were peaking that month suggesting to his readers it was time to take some profits or at least hedge long positions with covered calls. Now that prices have declined, sharply in some cases, the big question on investors' minds is whether it's time to jump back in. In a series of special reports coving roughly 70 of the most dynamic tech companies in the world, McWilliams presents both the data and his opinions on which stocks to buy and which to avoid. Click the link below to read his updated thoughts and enjoy a 21-day free trial of Next Inning:

https://www.nextinning.com/subscribe/index.php?refer=bw690

In his report on worldwide semiconductor sales, McWilliams wrote: "What we heard from Anadigics in its April earnings report was very consistent with the numerous posts I had written about Anadigics this year and was the proverbial '2x4' across Wall Street's forehead. As a result, the price of Anadigics rallied to nearly 90% higher than where it was trading when I called it a buy late last March..."

McWilliams also looks at these topics:

-- Why is McWilliams expecting the lighting market to increasingly turn towards LEDs at the expense of compact fluorescents? Is there evidence to support McWilliams' reasoning? Does McWilliams expect that buying Cree at current prices will work out well for investors?

-- Just days before Anadigics hit its 2008 high of $13.95, McWilliams advised readers to plan to take some profits or hedge with covered calls when the price hit $13.75. Now that Anadigics has pulled back significantly from its post-earnings highs, does McWilliams believe it's time to buy again? Why might Wall Street's fears about Anadigics be unfounded?

-- McWilliams suggested that readers buy Skyworks in March when the stock was trading for roughly $7.25. Following this in June, he suggested investors hedge long Skyworks positions by selling January 2009 $10 calls when the premiums surged above $2. Now that the stock has drifted back a bit, what does he think investors should do next?

-- McWilliams suggested that readers buy OmniVision last February when the stock was trading in the $12s. Shortly after this call, the price of OmniVision surged to the high-teens and McWilliams wrote it was time to hedge by selling September $15 calls. Now that the price has fallen back into the $12s, what does McWilliams think investors should do? What do his field contacts and the worldwide semiconductor sales data for image sensors suggest we should expect from OmniVision in its next quarterly report?

-- McWilliams predicted RF Micro's planned exit from the transceiver business over a year before it was announced. What was it that told McWilliams the company would be forced to look for greener pastures? Does McWilliams have long-term intentions for the RF Micro buy he called earlier this year when the stock was trading for $2.70 or did he suggest that readers lock in profits when the stock surged in May?

Founded in September 2002, Next Inning's model portfolio has returned 230% since its inception versus 77% for the Nasdaq.

About Next Inning:

Next Inning is a subscription financial newsletter focused on technology stocks. Editor Paul McWilliams is a 20+-year industry veteran.

NOTE: This release was published by Indie Research Advisors, LLC, a registered investment advisor with CRD #131926. Interested parties may visit adviserinfo.sec.gov for additional information. Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE: Indie Research Advisors, LLC

Next Inning Technology Research Marcie Martin, +1-888-278-5515

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