This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Dykstra: Cash Flow Is Ka-Ching King

Stocks in this article: PFE MSFT OXY

Tough opening day for the defending World Series champ Phillies on Sunday: The Atlanta Braves cooled the Phillies' jets, beating them 4-1. And in Baltimore on Monday, the Yankees' brand new, high-paid talent -- in the harsh glare of the spotlight -- couldn't stave off an opening day loss to the Orioles, 10-5.

Everyone feels like they've got a lot to live up to. But now that opening-day jitters are behind them, everyone can relax and play some ball.

I don't get jitters when picking stocks for my deep-in-the-money options trading system. You can follow my system -- which has a win record of 99-1 -- through a subscription to my Nails on the Numbers newsletter. One of my key measures in evaluating a pick is its cash flow.

Operating cash flow is reported in big, round numbers that need some context to see how good they really are. So today, let's look at the operating cash flow ratio, which is a company's operating cash flow divided by its current liabilities. What this gives us is a measure of how well a stock's cash flow covers its current liabilities.

The higher the ratio, the better. But few companies can approach a ratio of 1.0. Rather, many have cash-flow ratios that are near zero. But let's look at some cash-flow winners. Pfizer (PFE), which won for me in October, had operating cash flow of $5.97 billion in December. With current liabilities of $27 billion, the pharmaceuticals giant had an operating cash-flow-to-current liabilities ratio of 0.22 that quarter. That is up from a ratio of 0.17 for the same quarter of the prior year.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters