Use access key #2 to skip to page content.

November 2011

Recs

22

Declining businesses, cash cows or value traps?

November 20, 2011 – Comments (2) | RELATED TICKERS: BBRY

Most companies don't last forever. At some point, a company doesn't have attractive places to put earnings, so it should start returning them to shareholders either via dividends or stock repurchases. Later in the process the business will actually start to decline. At this point the business can be a great cash cow because there isn't any real capex and all the profits beyond normal maintenance can be returned to shareholders. But not that many businesses handle this stage very well.    [more]

Featured Broker Partners


Advertisement