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Both sides covet Cegetel's SFR wireless subsidiary for its fast growth and rich cash flow.
The controversial business model and rich cash flow make it easy for Wall Street to keep imprinting fresh narratives on the company.
In a report released earlier this month, Dresdner Kleinwort Wasserstein, an investment bank, argued that Schering's underperforming research pipeline and poor cost-cutting record, made the company vulnerable to acquisition by a private-equity firm eyeing its rich cash flow.
Threlfall thinks Lockheed deserves a high price/earnings ratio based on its rich cash flow, and believes the stock could hit $180 a share within the next 12 months.
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Until recently, Mr. Tirello said, many European energy companies were state owned, and they still enjoy the legacy of their monopoly positions, including rich cash flows.
Bain Capital was drawn to the rich cash flows generated by Clear Channel and undaunted by slow growth and regulatory concerns.
The table at the top of the page lists companies that have low or nonexistent dividends, rich cash flows and a history of shrinking their share count.
Fyhr argues that like the oil drillers in the mid-1990s, marine shippers will fetch richer cash flow multiples than they have historically, especially as more U.S. investors take an interest in the industry.
"The company has rich cash-flow yields, but no one will touch it because Lipitor goes generic in 2010 or 2011".
The home builders are dead through 2007, while newspaper empires and broadcasting franchises are far from moribund but still too rich on free cash flow valuations.
Finally though by 2011 Microsoft may seem as outmoded as Xerox does now Pabrai optimistically projects it will be trading at a rich 15 times cash flow, giving it a $204 billion market capitalization.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com