Tiny Company, Tons of Cash

Yesterday, I wrote an article revealing which U.S. companies have the most net cash in relation to their size. The idea behind the screen is to find cash-flush firms that are ready to spend and take advantage of lucrative opportunities as the economy turns.

However, my screen looked only at companies with market caps greater than $500 million. That's an unofficial boundary line we normally use, below which things can get a bit dicey in terms of risk and volatility. However, micro-cap land is where massive multibaggers are born -- the stocks that can increase 10 times in value or more. These are the types of stocks featured in the popular Tiny Gems sections of our Motley Fool Hidden Gems small-cap service.

So after requests to find cash-rich micro caps, I set my screen parameters for all U.S. companies valued between $100 million and $500 million that have a net cash position (cash minus debt) of at least 40% of their market caps.

Here are the top 15, sorted by net cash-to-market cap:

Company	Net Cash (Millions)	Market Cap (Millions)	Net Cash / Market Cap	Industry
Harbinger Group (NYSE: HRG  )	$141	$126	1.11	None
Vanda Pharmaceuticals (Nasdaq: VNDA  )	$202	$194	1.04	Biotechnology
Adaptec (Nasdaq: ADPT  )	$375	$366	1.03	Computer storage and peripherals
TomoTherapy (Nasdaq: TOMO  )	$149	$156	0.95	Health-care equipment
Sycamore Networks	$450	$496	0.91	Communications equipment
UTStarcom	$235	$260	0.9	Communications equipment
Ascent Media	$317	$357	0.89	Movies and entertainment
Maxygen, (Nasdaq: MAXY  )	$159	$181	0.88	Biotechnology
Baltic Trading (NYSE: BALT  )	$249	$286	0.87	Marine
Cypress Bioscience	$137	$162	0.85	Pharmaceuticals
BigBand Networks	$166	$196	0.84	Communications equipment
InfoSpace (Nasdaq: INSP  )	$231	$286	0.81	Internet software and services
Cutera	$97	$126	0.77	Health-care equipment
Ulticom	$78	$102	0.77	Application software
Infinity Pharmaceuticals	$126	$166	0.76	Biotechnology

The cash-rich position naturally mitigates some of the risk with these small fry, but these are not recommendations and I urge you to research them carefully. The top company, Harbinger, "does not have significant operations. It intends to identify and evaluate business combinations or acquisitions of businesses." Students of the markets may recognize its former name, Zapata Corp.

Still, some of these may eventually land on the list of the market's best stocks, which is why we invest in Tiny Gems in the first place!

Related links:

• It's the Market's 10 Best Stocks
• Cash-Rich Companies Ready to Pounce