Cash Flow Reigns Once Again

When sizing up stocks in uncertain times, it's best to follow the cash.

Last week's stock-market swoon showed how unsettled the investing landscape remains. As a result, earnings quality is coming into focus among some investment pros. When so many things can go wrong, they want to know that a dollar earned is really a dollar earned. And corporate cash flows are an important gauge of the quality of earnings.

Headline earnings numbers -- typically net income -- can be massaged by perfectly legal accounting tricks, such as changing depreciation schedules or the way revenue is recognized. Cash flows -- ...