Stocks are tricky. By the time you get through "studying" hundreds of gyrating stock quotes in search of that big mover, you can easily forget that there are actual businesses behind those ticker symbols. And if we owned any of them completely (hey, a man can dream, can't he?), we'd probably care less about their minute-to-minute price changes. Instead, we'd be concerned only about tweaking the business so that it returned exactly what paid the bills, made shareholders happy, and put food on the table -- cash.

A Fool's guide to free cash
Investing, after all, is about putting money up front today to get more of it in return tomorrow. Here at the Fool, we're firm believers that free cash flow, as opposed to traditional accounting earnings, is the best gauge of a firm's profitability (or lack thereof). You can learn more about the importance of free cash flow here.

So with those cash flow lessons deeply engrained in your Foolish subconscious -- or maybe just bookmarked as a "favorites" page -- I'll highlight three cash-cow favorites of our Motley Fool CAPS community.

I'll simply screen for companies with free cash flow-to-sales margins greater than 10% (also known as the Cash King margin) about which our community members are overwhelmingly bullish. The Cash King margin is a good way to account for size differences among companies, rather than just using an absolute level of free cash flow.

Cash rules everything around them
Unlike companies such as Nortel Networks (NYSE:NT), Blockbuster (NYSE:BBI), and (NASDAQ:OSTK), which struggle to keep the cash from gushing out their corporate windows, these companies have free cash practically flooding into them.

So, let's not waste another second. Sound the trumpets! Here's the second trio of Cash Kings from CAPS:


Cash King Margin (TTM)



Qualcomm (NASDAQ:QCOM)












As always, please don't consider these stocks as formal recommendations, but rather as suggestions worth further investigation.

Aside from free cash flow, there are obviously a ton of other things investors need to consider, from the company's balance sheet to its competitive landscape. After all, due diligence is the Fool's way to riches.

But just for starters, here's a quick summary of the stories behind these cash-throwing stocks, and what some of our CAPS members are saying.

Third-generation king
With a free cash flow-to-sales margin of more than 30%, Qualcomm takes the honors as this week's most prolific cash king. The California-based wireless-communications giant, which provides services based on its industry-standard Code Division Multiple Access (CDMA) technology, is a big favorite to outperform Mr. Market over the next several years. As the wireless industry steadily shifts to next-generation technology (known as 3G), many in our CAPS community feel that Qualcomm is in the prime spot to capitalize on this imminent tech-movement.

CAPS All-Star TMFPlaotish1 simply yearns for the good old days:

I haven't owned these guys since the '90s. I just wanted to get that feeling again. . This is a classic Rule Maker in an industry that is enormous and only getting larger. They will get their piece of the pie and should outperform the overall market. It's good to be king -- or at least one of several.

Garmin rules the world
A few weeks ago, our CAPS community chose Garmin, the personal navigation device (PND) maker and Motley Fool Stock Advisor selection, as the best international stock for 2007.

Fellow Fool Jim Gillies argued that the company, incorporated in the Cayman Islands, is easily one of the world's best stocks, because of its market dominance and impressive free cash flow growth (nearly 40% compounded since 2000). Many Garmin bulls in the CAPS community couldn't agree more.

Another CAPS All-Star, lisnel, is a satisfied customer of both Garmin's shares and its PNDs:

I am an owner of Garmin products and also its stock. I have owned shares of Garmin for over 2.5 years, weathering some fairly dramatic falls and even larger rises in its share price. With over $400M in cash, zero debt, quarterly dividend, and over 28% of its stock held by insiders, I see this as a strong long-term investment opportunity and plan to hold on to it for at least another 5 years.

Thy kingdom Volcom
Our last free cash flow king this week is Volcom, designer of board-sports apparel and Motley FoolHidden Gems selection. (I told you, we can't get enough free cash flow here!) Volcom was nominated by fellow Fool Alyce Lomax as the best small-cap stock for 2007 -- and for very good reason. Although Volcom throws off free cash like it's going out of style, the company's branding efforts and credibility within the extreme-sports culture ensure that its products remain in style.

CAPS newcomer AussieGolfer looks to his Australian buddies for some unique investment insight:

All my mates who snowboard, surf, and enjoy extreme sports are in love with this brand. They reckon it will never be as popular as Nike, but this is a good thing. They mentioned that if it became too mainstream, they wouldn't be interested in it anymore. So, I am hoping for extreme sports to gain lots of popularity, and with it, Volcom should skyrocket.

The Foolish bottom line
Free cash flow-generating companies like Qualcomm, Garmin, and Volcom are always among my top candidates for further research. Our Motley Fool CAPS intelligence database is a great place to come up with new investment ideas, read what fellow Fools think, and even voice your own opinion about your favorite stocks. Click here to join the forward-thinking CAPS community free of charge.

That's all for this week, Fools! Be sure to join us next week, when I'll feature three more cash kings from CAPS. Until then, may your cash flow forever flow free.

Garmin is a Motley Fool Stock Advisor selection, Volcomis aMotley Fool Hidden Gems recommendation, and is a former Rule Breakers pick. Try any of our Foolish newsletters free for 30 days.

Fool contributor Brian Pacampara is never one to turn down free cash, but he holds no position in any of the companies mentioned. The Fool's disclosure policy is always king.