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 by:

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 health and profitability (or lack thereof).

So, with these cash flow lessons deeply engrained 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 Medis Technologies (NASDAQ:MDTL) -- a cash-burning company that CAPS players overwhelmingly dislike -- these are businesses with free cash flow-to-sales margins of 15% and above (also known as the Cash King Margin), that our community is pretty bullish about.

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


Cash King
Margin (Trailing 12 Months)







Coca-Cola (NYSE:KO)




Blackboard (NASDAQ:BBBB)




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 what some of their loyal CAPS followers feel about them.

Semi sultan
With an impressive free cash flow-to-sales margin over 20%, Altera takes the honors as this week's most prolific cash king.

As one the world's leading players in the programmable logic device (PLD) industry, Altera has the dominant market share -- with its main competitor, Xilinx (NASDAQ:XLNX) -- a diversified base of more than 14,000 customers, and attractive growth prospects as PLDs increasingly become more cost-effective, to be able to keep its war chest stuffed with cash.

CAPS player tahoegeorge weighs the pros and cons:

Good management.
Great market opportunity and good products.
Good market share.
Good financials.
Very deep moat
Negative: semiconductors are a cyclical business; HOWEVER, ALTR is almost certainly a long-term survivor

King of cola
The next cash-flow monarch on our list is Motley Fool Inside Value pick Coca-Cola, the world's largest beverage company -- up 63% since our team selected it.

Founded in 1892, Coca-Cola has leveraged its sugary high-profit secret formula (costing pennies per gallon), the awesome power of its globally recognized brand, and rock-solid financial position to generate healthy dividends for shareholders. And with the well-respected, former COO Muhtar Kent set to succeed Neville Isdell as CEO, the cash should just keep on flowing.

CAPS All-Star Killim1 takes a swig:

What's not to like about KO? It has been a solid company and stock for decades. The financials look solid; it has tremendous international business, household name, market domination, and still has room to grow. How many KO products users slowed down their consumption of sodas through this last bout of market volatility?

Head of the class
Our last free cash flow ruler this week is Blackboard, a leading software provider to educational institutions, and a formal selection of our Motley Fool Hidden Gems small-cap service. It's up a whopping 116% since it was picked in 2005.

Blackboard's dominant competitive position (essentially the educational software standard with more than 3,400 primarily college clients), high switching-costs for those clients, and capital-light business model are what drive the cash for this king. With the stock showing some weakness over the past month, BBBB might even stand for a bounce-back bargain.

CAPS All-Star JPDemers writes on the Blackboard:

Well managed, steady growth, a dominant position in their market, and vast potential if they just keep on doing what they're doing. It ain't Google, but if you're a buy-and-hold investor like me, what's not to like?

The Foolish bottom line
Free cash flow-generating companies like Altera, Coca-Cola, and Blackboard 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 stocks.

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

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

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.