This paper uses financial statement data to develop a parsimonious measure of the extent to which a firm is raising (distributing) capital from (to) capital market participants. The relation between the resulting measure of net external financing and future stock returns is stronger than has been documented in previous research focusing on individual categories of financing transactions. For example, the mean annual hedge portfolio return to going long in securities of the lowest financing decile and going short in securities of the highest financing decile exceeds 15%.  The paper also shows that, after controlling for refinancing transactions, these results are robust across all categories of external financing transactions including issuances and repurchases of common stock, preferred stock and debt.