5 Cash-Rich Companies at Bargain Prices

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"I don't look to jump over seven-foot bars: I look around for one-foot bars that I can step over." 
 -- Warren Buffett

If you're in the market for those one-foot bars Buffett loves, I've got a good starting point: companies beaten to such a pulp that just their net amount of cash on hand represents a significant portion of their share price. On a few rare occasions, you're being handed the actual business operations for free -- or at least, close to it.

Using the wisdom of our 130,000-investor-strong Motley Fool CAPS community, I went on a hunt for companies fitting these bargain-basement criteria. Specifically, I looked for:

• Estimates of profitability in 2009.
• No long-term debt.
• A high level of total cash in relation to current share price.

Pretty straightforward. I came across these five, among others:

Company	Market Cap	Recent Price	Total Cash per Share	2009 EPS Estimates	CAPS Rating (5 stars max)
Google (Nasdaq: GOOG)	$102 billion	$323.53	$50.25	$21.00	***
Autodesk (Nasdaq: ADSK)	$2.8 billion	$12.74	$4.33	$0.63	****
Juniper Networks (Nasdaq: JNPR)	$7.7 billion	$14.77	$4.20	$0.81	***
Somanetics (Nasdaq: SMTS)	$160 million	$13.34	$4.75	$0.59	*****
MicroStrategy (Nasdaq: MSTR)	$392 million	$32.99	$10.34	$3.01	***

Data from Motley Fool CAPS and Yahoo! Finance, as of March 12, 2009.

Gunning for Google
I was the target of numerous boos and hisses in November 2007 for calling Google and Chinese rival Baidu.com (Nasdaq: BIDU) ridiculously expensive. I'm happy to say I won that battle. Great companies with rock-solid balance sheets that are bulldozing their respective industries deserve a spot in your portfolio, just not when everyone and their neighbor is clamoring to get their hands on shares.

And while Google is well off its November lows, you're looking at one of the strongest companies in the world that's dominating nearly everything that can be digitized and it's trading at less than half of its 2007 highs. CAPS member psudoug04 shares similar feelings, writing last month:

I love this stock over the long-term and I'm very excited about the chance to get in at the current price. Google is a clear market leader in so many ways and poised to capitalize on future trends such as cloud computing and mobile-based advertising. They are one of the fastest growing companies and they're sitting on tons of cash. They continue to show inventiveness and to be an industry leader.

CAPS member MoPicks took it a step further and elaborated on some of Google's future potential beyond Web ads, writing back in January:

[Google's] suite of products has made it a leader in search, widgets, advertising and now it's pushing out its enterprise office software at a fast-growing rate. It's faster, more versatile, and much much cheaper than market leader [Microsoft (Nasdaq: MSFT)]. If it keeps executing, it'll win the office software space of the 21st century all the while driving unbelievable pressure on [Microsoft's] margins.

Add to that yesterday's news that Google has launched a VoIP phone service -- aiming straight at the Skype-dominated communication world -- and it doesn't seem like there's an inch of the digital universe this company doesn't want to rule. Take a cash-rich and notoriously innovative company like Google and stick it in the middle of a global economy where competitors eschew risk-taking innovation, and good things are bound to happen.

On the valuation side, shares currently trade at around 15 times 2009 earnings -- perhaps not as cheap as other opportunities you can find today, but certainly nothing to sneeze at for a company expected to grow more than 18% per year for the next five years.

Your turn to chime in
What do you think about Google, or any other stock for that matter? More than 130,000 investors use Motley Fool CAPS to share ideas and swap opinions. Click here to check it out and speak your mind. It's 100% free to participate.

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