Quick now, what’s the cheapest way to play the market?

Buy the best values, of course, not the cheapest stock. But what’s the best value metric? In this vein, five ideas follow from one well-regarded investment adviser who believes his no. 1 valuation theme offers stock market players 15% to 20% on their money over the next 12 months.

Obvious choices in calculating what’s really cheap would probably be those measurements with the greatest investor familiarity, such as a paltry price/earnings multiple, low price-tobook value, and a fat dividend yield with the potential to get fatter. Or, there’s the perennial favorite of billionaire investors such as Carl Icahn, Warren Buffett, and George Soros, the liquidating asset value, namely what a company’s assets would fetch if it were to sell off all of its businesses?

To the contrary, one investment adviser, Richard Moroney, casts his vote for what he believes is far and away the most viable value metric – that is, free cash flow, which is the amount of cash a company has left over after paying all its operating expenses. He also rates this measurement as the single best indicator of a company’s financial health.

In this context, Mr. Moroney, the research director of the monthly newsletter Dow Theory Forecasts, conducted an analysis of all the companies DTF follows to determine the stocks with the best ratios of price to free cash flow. As a rule of thumb, he considers anything below 15 cheap, provided, of course, the company sports solid fundamentals.

To calculate free cash flow, you start with a company’s operating cash flow and subtract capital spending and dividends, then boil it all down on a pershare basis.

History shows it’s a valuation indicator that really works. Examining 12-18 month stock returns, the newsletter found that the cheapest one-fifth of stocks in the Dow Jones Total Market Index (TMI) as measured by the price to free cash flow ratio outperformed the typical TMI stock by an average of 5.6% a year since 1992.

So the obvious question: Which are the best cash flow plays? DTF favors five companies with a price to free cash ratio under 15. A brief rundown of its three favorites, each of which is viewed as a potential 15% to 20% market gainer over the next year, follows:

Delphi Financial ($50.86): A provider of employee-benefits services, it trades at a price to free cash flow ratio of 5.5. The company is capitalizing on strong demand for excess workers’ compensation insurance. And while hefty price increases seem unlikely, premiums in general remain at high levels.To boost volume, the company is adding sales agents. Consensus estimates project per-share profits will climb 22% to $4.10 in 2006 and 12% to $461 in 2007.

Freeport-McMoran Copper & Gold ($60.91): The stock has been choppy, partly because of volatile commodity prices and political instability in Indonesia. The company, which operates gold, copper, and silver mines in Indonesia, is one of the world’s lowest-cost copper producers. Uncertain supply and dwindling inventories have sharply boosted the copper price, but futures project a 14% decline over the next two years. Freeport expects its copper production will decrease roughly 10% this year and is not planning to develop any major mines. But strong demand and high commodity prices should support near-term profits. At 10.7, the price to free cash ratio seems reasonable, Mr. Moroney says.

MetLife ($48.48): The country’s largest life insurance provider with about $2.8 trillion in force, sports a meager 5.1 price-to-free-cash-flow ratio.The company projects 2006 earnings of $4.25 to $4.50 a share, versus $4.33 last year. But Mr. Moroney regards management’s guidance as conservative, based on recent operating momentum and solid industry fundamentals.

The two other DTF favorites are Parker Hannifan ($81.24), a maker of fluid control equipment and aerospace components, and insurer Hartford Financial Services ($80.62).Their respective price to free cash flow ratios are 14.8 and 7.8.

The bottom line: If you’re looking to make a good buck in the market, look no farther than cashing in on cash flow.