Longtime investor and Seeking Alpha author Mark Bern, CFA, one of the co-authors of Friedrich Global Research, joins the Marketplace Roundtable to talk about their focus on free cash flow. Mark shares how the firm uses strict investing criteria consisting of primary and secondary ratios helps avoid mistakes, with a focus on consistency in company performance.
The current market environment still has upside potential and Mark likes tech companies such as Netflix (NFLX) that have demonstrated an ability to grow. "But we also believe the bull is stretched, unless growth picks up the second half of the year."
There are reasons to be concerned about valuations of certain stocks and if trade issues in China and Europe go awry, it would make the multiples a lot harder to sustain. He calls out a couple other long ideas which he think will play out well.
Topics covered:
2:00 minute mark - Investing strategy 4:00 - Finding the "moat" 5:20 - Why Mark prefers large-cap companies 7:10 - What to look for in markets in coming months 8:40 - Netflix earnings and why the naysayers are going to be wrong 12:30 - Concerns over valuations 15:00 - Friedrich's 60-year backtest model 16:25 - Why CACC remains a favorite idea 18:30 - Universal Insurance Holdings' potential