Had Jerry Maguire been an investor, instead of a fictional sports agent, he might have become famous for yelling, "Show me the cash flow!"

Earnings come and go, and the green-eyeshade types can legally manipulate them to mask a company's true operations. Yet its ability to generate cash -- what comes in the register and goes out the door -- remains the preeminent indicator of company's worth. In short, cash is king.

Below, we'll look at companies that have proven themselves prodigious generators of free cash flow (FCF) -- the amount of money a company has left over to potentially pay to its investors. We'll find companies that have generated compounded free cash flow growth rates exceeding 25% annually over the past five years. Then we'll filter them through the opinions of the more than 120,000 members of our Motley Fool CAPS investor intelligence community, to see which of these stocks might have the best chance of outperforming the market.

Over the first 20 months since CAPS began tracking the data, four-star stocks have outperformed the market by more than seven percentage points, while five-star stocks did even better. Keeping an eye on these top stocks might signal your best opportunity to capture those gains.


Levered FCF 5-Yr CAGR

CAPS Rating (5 Stars Max)

Boston Scientific (NYSE:BSX)






GameStop (NYSE:GME)



Priceline.com (NASDAQ:PCLN)



Valero Energy (NYSE:VLO)



Source: Capital IQ, a division of Standard & Poor's; Motley Fool CAPS.
CAGR = compounded annual growth rate.

Generating copious amounts of cash doesn't make a company an automatic buy. But having looked at Enron's cash flows, instead of its earnings, would have saved many investors a lot of grief. Warren Buffett understands that the value of a company today is calculated by its discounted future cash flows, so use this list as a jumping-off point to dig deeper into these companies' piles of greenbacks.

The slide in commodity prices has two notable side effects: It's brought low the share prices of the companies that produce them, but also pummelled the value of the exchanges on which they trade. CME Group has seen its shares fall by 72% since the start of the year, and by more than half since the beginning of summer, when commodity prices began their collapse. But CAPS member thepitboss thinks that the market for toxic debt instruments like CDS could provide an opportunity to exploit:

CME Group, with its current plans to provide a CDS exchange (those toxic debt backed securities that have troubled the economy) will see to benefit greatly from this exposure to the general public. Interest in the group will also increase due to the current rush to bonds and other securities along those lines that are traded on the CME's exchanges. CME has been around for many years, trading enormous amounts of volume day after day.

Ring the register
All by itself, a drop in oil prices ought to help refiners like Valero, Tesoro (NYSE:TSO), or Western Refining (NYSE:WNR). But if falling demand for fuel fuels such price cuts, those refiners could face more difficult times ahead. Still, top-rated CAPS All-Star Alwayzwrong believes that a collapse in supply is the more hazardous near-term threat than a lapse in demand:

I am well aware that this pick will turn negative in the short-term, but I am making it nonetheless, because the refiners have--without intention--colluded to cut production. It is the only prudent thing to do. All are hoarding money, mainly through cutting capex, to sustain themselves in such a difficult economic climate. The supply side of gasoline is starting to show signs of strain, because we are near a point where increasingly low gasoline prices cannot be sustained. We are faced with either of two outcomes, shortages driving the price up, or an (exogenous) increase in gasoline prices, or crude. Supply erosion is more likely at this point than continued demand destruction.

[Valero] has been squeezed in both directions this year (high crude prices this summer and low gas prices this winter). Very little else can happen from a macroeconomic standpoint.

Follow the money

Despite the trail of dollars these stocks have left, it pays to start your own research on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Head over to the completely free CAPS service, and share your opinions on these or any other stocks that you think will continue to rake in the dough.

Priceline.com and GameStop are Stock Advisor selections. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey owns shares of GameStop, but he does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.