Welcome back to the world of the Cash Kings, where we highlight businesses that generate a healthy dose of free cash flow. Why is cash flow so important? Because it gives management the opportunity to boost shareholder value through actions like:

  1. Paying dynasty-building dividends.  
  2. Buying back shares at attractive prices.
  3. Growing the business organically without having to borrow money or sell shares. 

A Fool's guide to free cash
Investing, after all, is about putting money up front today in order 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 health and profitability (or lack thereof).

So, with these cash flow lessons deeply ingrained in your Foolish subconscious -- or maybe just bookmarked as a "favorites" page -- I'll highlight three more cash-flow rulers of our Motley Fool CAPS kingdom.

Unlike Nortel Networks (NYSE:NT) -- a cash-burning company that CAPS generally dislikes -- these are businesses with free cash flow-to-sales margins above 15% (also known as the Cash King Margin) that our community is overwhelmingly bullish about.

So, sound the trumpets! Here's another trio of Cash Kings from CAPS:


Cash King Margin (ttm)

CAPS Bulls

CAPS Bears

Syneron Medical (NASDAQ:ELOS)




Cedar Fair (NYSE:FUN)




SK Telecom (NYSE:SKM)




As always, don't consider these stocks as formal picks, but rather as suggestions worth further investigation. After all, due diligence is the Fool's way to riches.

But just for starters, here's a quick summary of these cash-throwing kings, and how some of their loyal CAPS followers feel about them.

Wrinkle-free ruler
With a whopping free cash flow-to-sales margin of more than 30%, Syneron Medical takes the honors as this week's most prolific cash king. As a recognized leader in the medical aesthetics market, Syneron has beauty-enhancing elos technology (or electro-optical synergy), a mammoth customer base of more than 6,000 systems, and a recently signed 10-year exclusive agreement with Procter & Gamble (NYSE:PG), all of which help keep its canons stuffed with cash.  

In addition, CAPS player Swizzled says that gorgeous demographic trends, coupled with a stunningly attractive PEG of 0.80, make Syneron's shares worth checking out:

Aging populations mean increased dental problems, and cosmetic procedures just keep getting more popular with young and old. Syneron is selling at a very reasonable p/e vs. its growth, is financially solid, and should be able soon to get its earnings growth commensurate with its outstanding revenue growth.

King of coasters
Motley Fool Income Investor selection Cedar Fair is a free cash-flowing monarch that has used smart acquisitions and an efficient operating strategy to become arguably the best amusement park operator in the world. Cedar Fair's wildly popular parks -- including Canada's Wonderland (Toronto), Knott's Berry Farm (California), and Cedar Point (Ohio) -- entertain more than 25 million guests each year.

Thanks to the 2006 acquisition of Paramount Parks from CBS (NYSE:CBS) and a long history of consistently growing dividends, CAPS player Phalo thinks Cedar Fair shareholders are in for a safe, secure, and fun ride to outperformance:

Income producer with regular, structured, dependable dividends. Recent acquisition of Paramount parks and overall strategy will be fueled by Americans' "stay and play at home" mentality. What's more FUN than 25-cent cotton candy and killer rides!

This sultan's got Seoul
Our last free cash flow king this week is Motley Fool Global Gains pick SK Telecom, South Korea's largest wireless carrier with more than 20 million subscribers. The Seoul-based company already owns more than half of the highly penetrated market in Korea, but recently signed agreements with EarthLink (NASDAQ:ELNK) and China Unicom should enable it to capitalize on opportunities abroad.

It's that type of scale, market share dominance, and prospects for growth that have our CAPS community excited about the company's future. For example, rajeevg helps us make a clear call on SK:

Earnings won't grow substantially because the wireless market in Korea is quite mature, although investments in China, Vietnam and the U.S. have potential. At a P/E of 8, all this is gravy. A good business, with consistently high returns on equity.

The Foolish bottom line
Free cash flow-generating companies like Syneron Medical, Cedar Fair, and SK Telecom are always among my top candidates to research further. Our Motley Fool CAPS intelligence database is a great place to look for your own Cash Kings or read how your fellow Fools feel about thousands of different stocks.

Click here to join the forward-thinking CAPS community free of charge.

Be sure to join us next week, when I'll feature three more cash kings from CAPS. Until then, may your cash flow reign supreme.   

For more CAPS-style Foolishness:

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy is the strict set of rules that always rules Fools.