When seeking out new investment ideas, I like to run stock screens to find companies that are inexpensive and relatively “safe.” Of course, one of the safest kinds of companies is one that is profitable, yet also has lots of cash on the books. In fact, some companies are so cash-rich that even after accounting for any borrowings, their cash can equate to 20%, 30% or even 40% of the entire company’s market value. If you think about it, that also means these companies are fairly loathed by investors. Read More
When seeking out new investment ideas, I like to run stock screens to find companies that are inexpensive and relatively “safe.” Of course, one of the safest kinds of companies is one that is profitable, yet also has lots of cash on the books. In fact, some companies are so cash-rich that even after accounting for any borrowings, their cash can equate to 20%, 30% or even 40% of the entire company’s market value. If you think about it, that also means these companies are fairly loathed by investors. It’s not just that they have so much cash, it also means their market value has slumped so low that the company isn’t really worth much more than that cash. All of the companies on the list above have real problems. Cisco Systems (Nasdaq: CSCO), for example, has seen its shares fall back to levels seen in 1998, as sales growth has slowed. And all of that cash can’t always buy happiness. Dell (Nasdaq: DELL) has made a half-dozen key acquisitions in the past two years, yet analysts still think sales will only grow 4% to… Read More