Decision summary
Question: Free Cash Flow Growth vs Future Returns
FCF growth >30% produced a 31.8% median 24-month return versus 25.2% for all eligible observations. The loss greater than 20% rate was 12.5% versus 13.7% baseline.
- Future return potential: FCF growth >30% median 31.8% versus All eligible observations 25.2%; excess 6.6%.
- Correction/drawdown risk: loss greater than 20% 12.5% versus baseline 13.7%; excess -1.2%. Median max drawdown -8.9%.
- Entry timing risk: entry condition Favorable based on loss risk and forward drawdown.
- Use: buying/holding/trimming decisions require entry condition, thesis condition, and current position. No simple Buy/Sell label is inferred from price history alone.
Baseline comparison
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF growth >30% | 31.8% | 1.3% | 65.6% | -26.5% | 76.2% | 12.5% | 8.7% | 3.0% | -8.9% | 1,013 |
| All eligible observations | 25.2% | -2.0% | 55.1% | -27.5% | 73.5% | 13.7% | 9.0% | 3.4% | -10.4% | 4,650 |
| EW broad index | 28.3% | 13.9% | 51.5% | -0.9% | 85.9% | 3.6% | 3.1% | 0.0% | -9.6% | 4,641 |
| Signal excess vs baseline | 6.6% | -1.2% | -0.3% | -0.4% | 1.5% |
Distribution by bucket
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF growth >30% | 30.5% | -0.9% | 64.5% | -28.6% | 74.5% | 13.5% | 9.2% | 2.4% | -9.8% | 7,133 |
| 10-30% | 32.8% | 7.6% | 62.3% | -16.1% | 81.0% | 8.7% | 5.7% | 1.7% | -7.2% | 4,368 |
| 0-10% | 23.7% | -2.8% | 53.3% | -26.7% | 72.6% | 13.2% | 8.6% | 3.2% | -10.2% | 32,182 |
| Negative | 26.1% | -1.4% | 57.9% | -27.9% | 74.0% | 13.8% | 9.2% | 3.7% | -9.9% | 9,575 |
Current ticker mapping
| Ticker | Current signal | Historical median return | Loss >20% | Entry condition | Suggested action |
|---|---|---|---|---|---|
| AAPL | FCF growth 31.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| ADI | FCF growth 43.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| AMD | FCF growth 211.4% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| AOS | FCF growth 59.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| APH | FCF growth 108.6% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| AVGO | FCF growth 39.4% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| BBWI | FCF growth 31.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| CCL | FCF growth 50.4% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| CMG | FCF growth 128.7% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| CVX | FCF growth 157.7% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| DAL | FCF growth 38.8% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| DG | FCF growth 41.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| EL | FCF growth 35.5% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| EXPE | FCF growth 72.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| FAST | FCF growth 34.0% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| FL | FCF growth 675.0% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| GD | FCF growth 85.5% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| GE | FCF growth 69.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| GME | FCF growth 360.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| ISRG | FCF growth 62.4% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| JWN | FCF growth 1344.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| KSS | FCF growth 453.8% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| LKQ | FCF growth 42.8% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| LRCX | FCF growth 58.3% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| M | FCF growth 39.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| MHK | FCF growth 42.7% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| MPWR | FCF growth 52.2% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| MU | FCF growth 1596.5% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| NEM | FCF growth 117.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| NFLX | FCF growth 59.7% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| NOC | FCF growth 86.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| NVDA | FCF growth 58.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| NXPI | FCF growth 46.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| PLTR | FCF growth 103.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| REGN | FCF growth 32.6% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| ROST | FCF growth 34.9% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| RTX | FCF growth 55.1% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| SNPS | FCF growth 74.8% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| STX | FCF growth 212.0% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
| TMO | FCF growth 35.7% | 31.8% | 12.5% | Acceptable with staged entry | Stage entries if thesis and margins remain Intact |
Suggested actions
| Situation | Suggested action |
|---|---|
| No position | Starter or staged entry is supported if thesis condition is Intact and valuation/liquidity filters pass. |
| Partial position | Hold and add in stages while thesis remains Intact. |
| Full position | Hold; new adds require portfolio room. |
| Overweight position | Do not add solely because the base rate is favorable. |
| Thesis deteriorating | Reduce or avoid regardless of historical base rate. |
What this signal does not mean
This signal does not create a simple Buy/Sell label. It is a historical base-rate input for entry sizing, holding discipline, and thesis monitoring.
Dataset disclosure
Universe: local database stocks with adjusted monthly prices from 2001-01-31 to 2026-06-26. Historical S&P 500 snapshot membership exists, but the studies use the available local stock universe rather than fully reconstructed historical constituents. Filters: adjusted price at least $5, trailing 3-month average daily dollar volume at least $1 million, market cap at least $300 million when available. Survivorship-bias risk remains.
Methodology
Observations use monthly adjusted prices when available, 24-month forward returns, forward maximum drawdown from the observation price, and a 12-month cooldown to reduce overlapping signals. Baseline uses all eligible observations that pass the same price/data availability filters. EW broad-market index is used because SPY price history is not available in the local service.
Historical patterns do not guarantee future results.