Zacks.com announces that Richard Moroney highlights the following stocks: Ball, Disney, FedEx, Home Depot, and Intel.

CHICAGO -- Richard Moroney says investors should look to cash flow as another check on valuation. Read about Ball (NYSE:LL), Disney (NYSE:DIS), FedEx (NYSE:FDX), Home Depot (NYSE:HD), and Intel Corporation (NASDAQ:INTC). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84.

Highlights from the November 8th Featured Expert column by Richard Moroney includes:

As a further check on valuation, consider a stock's price relative to cash provided by operations (found on the statement of cash flows). Because cash provided by operations, or cash flow, is not impacted by such non-cash items as depreciation and amortization, it can provide a more complete picture of a company's results. Also worth considering is free cash flow, which equals cash flow minus dividends and capital expenditures. When a company's free cash flow is high relative to its stock price, its ability to enrich shareholders through stock buybacks or dividend increases is considerably enhanced.

Below are companies for which cash flow and free cash flow are relatively high compared to the stock price. They have delivered solid growth in cash flow and free cash flow over the past 12 months. They also have cash-flow yields (cash flow divided by stock price) and free-cashflow yields (free cash flow divided by stock price) at least as high as the median company in the S&P 500 Index.

Ball (NYSE:BLL) has taken advantage of its strong cash flow to bolster its balance sheet. At the end of September, long-term debt stood at $1.5 billion, down 17% from a year earlier. The company expects to buy back up to $200 million of its shares in 2005. For 2004, the consensus per-share profit estimate is $2.53, up from $2.08 in 2003. For 2005, estimates range from $2.49 to $3.00. The stock's cash-flow yield is 13.7%, compared to medians of 8.4% for S&P 500 companies and 10.2% for the materials sector.

Disney (NYSE:DIS) seems reasonably valued at 11 times 12-month cash flow per share of $2.35, a 9.2% cash-flow yield. The early success of the ABC network's new lineup could bolster Disney's sales and earnings. Cable operations, fueled partly by ESPN, have delivered solid ratings. For fiscal 2004 ended September, the consensus profit estimate is $1.06 per share. For fiscal 2005, Wall Street targets per-share earnings of $1.20.

FedEx (NYSE:FDX) has an attractive cash-flow yield of 11.7%. Over the past 12 months, per-share cash flow was a healthy $10.63, up from $6.58 a year earlier. Improved pricing and strong demand for international express delivery should fuel near-term growth.

Other attractive values based on cash flows include:

Home Depot (NYSE:HD) is the one of world's largest home improvement retailers.

Intel Corporation (NASDAQ:INTC), one of the world's largest semiconductor chip makers, supplies the computing and communications industries with chips, boards, and systems building blocks that are integral to computers, servers, and networking and communications products.

Read Richard Moroney's complete commentary, and learn about several more attractive values based on cash flow, by clicking: http://at.zacks.com/?id=85.

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