Michael Markowski, "The Best picker on Wallstreet" - Smart money http://www.smartmoney.com/onthestreet/index.cfm?story=20031121 had the following to say and I have provided the graphs so you can see what he is talking about.
Centennial Communications Corp. (NASDAQ: CYCL)
Centennial Communications Corp. and its subsidiaries provide wireless and broadband telecommunications services. The company provides wireless network access and other services to wireless telephone subscribers in Puerto Rico, the Dominican Republic, and the United States Virgin Islands.
Free cash flow turned positive and increased at a growth rate of 290% for its trailing 12 months and fiscal year ended May 31, 2006 after four consecutive quarters of declining annualized free cash flow. CYCL's Free Cash Yield is also at an eight quarter high of 8%. Its shares are also looking much better technically after a down price gap from $15 to $10 occurred in January of 2006, which was followed by a gradual decline to under $4.00 per share. It now appears that downward momentum has turned and that the shares are building a base for an upward advance.
By looking and understanding the graphs below you will see what Michael is talking about. Below you can see the 5 year operational cash flow (OPS) chart.
If you have read our discussions on cash flow investing and understand how to read the graphs you will understand the 5 year chart does not give us a good enough indication of what is taking place within the financial statements and is only the starting point. (To learn about these graphs go to the free tutorial a www.free-cash-flow.com/tutorial.html and you will learn the basics.)
Next we look at the graph below depicting the last 4 quarters.
After looking at the last 4 quarters we need to look at the 20 quarter charts to really understand the business and to look at quarterly trends year over year.
However, the Guru's we all try and follow, including Michael, really only concentrate on the following two graphs. It is these graphs that cause Michael's picks to outperform the market year after year.
As stated earlier we need to look at the 20 quarter chart to get the real picture.
Here you can see what Michael is getting at and why this stock is poised to do well. If you go down to line 11 you will see CYCL's Free Cash Trailling Tweleve Month growth percentage at 290% while the previous 4 quarters are negative. The Free CashYield at line 10 at the end of Q4 was 7.4%. Unfortunately when I received this graph the bottom was cut off or you would have seen at yesterday's closing price the Free Cash Yield now stands at 8% as Michael indicates. With these metrics as his comfort base Michael now turns to the technical charts which I have not published but which he mentions at the top of the article.
The results of this analytical view of CYCL combined with a technical analysis lead Michael to believe this stock is poised to move up.
Due to the fundamentals shown here this stocks will hold its' own through this volatile market and will explode when the volatility subsides.
Please take the time to read through the tutorial at www.free-cash-flow.com/tutorial.html it is free and will help you understand why Michael picks the stocks he does every week.
If you would like more information on the system Michael uses please send me an e-mail to [email protected]