OCZ Technology Group's total free cash flow for the
months ended in Aug. 2013 was
€-5.4 Mil.
Its total free cash flow for the trailing twelve months (TTM) ended in Aug. 2013 was €-60.5 Mil.
OCZ Technology Group's Free Cash Flow per Share for the
months ended in Aug. 2013 was €-0.08.
Its free cash flow per share for the trailing twelve months (TTM) ended in Aug. 2013 was €-0.89.
OCZ Technology Group Free Cash Flow Historical Data
The historical data trend for OCZ Technology Group's Free Cash Flow can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.
OCZ Technology Group's Free Cash Flow for the fiscal year that ended in Feb. 2013 is calculated as
Free Cash Flow for the trailing twelve months (TTM) ended in Aug. 2013 adds up the quarterly data reported by the company within the most recent 12 months, which was €-60.5 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
OCZ Technology Group (FRA:OADA) Free Cash Flow Explanation
Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.
In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.
This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.
OCZ Technology Group Free Cash Flow Related Terms
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OCZ Technology Group (FRA:OADA) Business Description
OCZ Technology Group, Inc., a Delaware corporation was formed in 2002. The Company is a provider of high performance solid state drives (SSDs) and memory modules for computing devices and systems. It develops flexible and customizable component solutions quickly and efficiently to meet the ever changing market needs and provide superior customer service. Historically, it mainly sold high performance memory modules to individual computing enthusiasts through catalog and online retail channels. However, SSDs have emerged as a strong market alternative to conventional disk drive technology and SSDs are rooted in much of the same basic technological concepts as its legacy memory module business. Today, as part of a diversification strategy which began in fiscal year 2009, its product mix is significantly more weighted toward the sale of SSDs and the SSD product line has become central to its business. As a result, its target customers are increasingly enterprises and original equipment manufacturers (or OEMs). It designs, develops, manufactures and distributes high performance components for computing devices and systems, including SSDs, other flash memory storage, memory modules, thermal management solutions and PSUs. Its ten largest customers are Amazon.com; ASK Corporation; BAS Group; D&H Distribution Company; Maxcom Memory GmbH; Memoryworld GmbH & Co., KG; Micro Center Corporation; Micro Peripherals LTD; NewEgg.com, operated by Magnell Associate Inc.; and SYX Distribution, Inc. The Company's business is subject to regulation by various federal and state governmental agencies.
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