When it comes to investing, we’re always looking for high-performing, quality companies. It’s become notoriously difficult to parse corporate earnings reports, attempting to make sense of balance sheets and income statements, which can be subject to financial engineering. This is why we focus on one of the most important and reliable financial metrics there is: free cash flow.
Free cash flow is essentially the cash that a company has on hand after subtracting operating expenditures. This cash is discretionary, available to be spent however a firm chooses; to pursue new opportunities such as developing new products, making acquisitions, or issuing a dividend. It is the lifeblood of companies that helps indicate overall health. Through years of research and experience, TrimTabs Asset Management has been recognized for its vigilance in focusing on free cash flow.
The only reason to start a business is to grow cash. Ultimately, it’s not to create earnings per share or revenue growth. It’s to create free cash flow after all expenses.
At TrimTabs, it is our firm belief that investors should be able to access alpha-oriented strategies that aim to outperform the broad market without paying high management fees.
The implementation of our philosophy—in other words, our process—is grounded in our decades of research. Because the investment challenge is so complex and, typically, volatile, this research is based on strict quantitative principles. As we apply our analysis, we utilize a disciplined, rules-based approach. At the day-to-day level, the process does allow some discretion with regard to portfolio turnover and tax effects. Additionally, we monitor allocations to industries, sectors, and capitalization segments. These avenues of discretion also allow us to respond quickly to changing underlying market conditions. Nonetheless, one of our prime missions is to minimize surprises for our clients. We are dedicated to providing investors a steady application of our proven, quantitative philosophy.
At TrimTabs, it is our sincere belief that investors shouldn’t have to pay an arm and a leg to gain access to professional active management, which, in our case, focuses on high quality companies with great free cash flow. That’s why we’re committed to keeping our fees low across our entire family of alpha-oriented strategies, delivering those cost savings directly to investors. I’ve been in the ETF business for a good long while—since their early days 20 years ago—and while there are certainly a good number of ways to put together a portfolio, for my money, free cash flow takes the prize, which is why I'm thrilled to offer our free cash flow fund and strategies to you. We seek to provide affordable investment options to you. Please have a look around—get to know our fund better! You can start by downloading one of our investment cases or whitepapers. And by all means, please don’t hesitate to reach out if you have any questions regarding our fund or strategies.
Vice Chairman & Chief Investment Ofﬁcer