It's not often that you can make an investment case for two growth stocks based on their free cash flow (FCF), but I think that's the case for Trimble (NASDAQ: TRMB) and PTC (NASDAQ: PTC) right now. Both stocks are set to increase their FCF significantly in the coming years and are highly attractive to investors. Here's why. 

With just $348 million in FCF in 2022, nobody is buying Trimble based on its recent cash flow generation. After all, its $13.1 billion market cap means it trades on 26.6 times its trailing FCF. Put another way, it generated just 2.7% of its market cap in FCF. Throw in that Trimble's sales were flat in 2021, and it's not hard to see why investors taking a superficial look might walk away from the stock. 

However, I think that would be a mistake for three reasons. 

Continue reading

Source Fool.com