"I don't look to jump over seven-foot bars: I look around for one-foot bars that I can step over."  -- Warren Buffett

If you're in the market for those one-foot bars that Buffett loves, here's one of the best places to look: companies beaten to such a pulp that just their net amount of cash on hand represents a significant portion of the share price. In some cases, you're being handed the actual business operations for free -- or at least, close to it. Doesn't get much better than that, does it?

Using our Motley Fool CAPS screening tool, I searched for companies fitting these bargain-basement criteria. Specifically, I looked for:

  • Estimates of profitability in 2009.
  • No long-term debt.
  • A high level of total cash in relation to current share price.

Among others, I came across these five:


Market Cap

Recent Price

Total Cash per Share

Fiscal 2009 EPS Estimates

CAPS Rating   
(5 stars maximum)

Activision Blizzard (NASDAQ:ATVI)

$12.1 billion





American Eagle Outfitters (NYSE:AEO)

$1.8 billion





Autodesk (NASDAQ:ADSK)

$3.89 billion






$16.4 billion






$233.1 million





Data from Motley Fool CAPS, Yahoo! Finance, and Capital IQ as of Feb. 3.

You can run the same screen yourself, if you like. None of these are formal buy recommendations -- just a good starting point for more research.

Unemployed, broke, and bored
I'm looking for silver linings in this brutal economy. I'm looking hard. They're few and far between.

Thankfully, one popped up yesterday that might help a stock like Activision Blizzard. It came from The Wall Street Journal, mentioning:

Internet games, gambling and other forms of online entertainment have seen significant surges in use in the several months since the economic downturn deepened. … The trend echoes the escape mechanisms that people turned to during the Great Depression in the 1930s.

Sad as it is -- and a sign of the times -- it's probably true. More than ever, our living rooms are filling up with idle bodies during the work week. Need a mental break from the economic anguish? How about a game of World of Warcraft! You get the idea.  

CAPS member finfanwoman10 recently elaborated on this point:

The gaming industry has proven to be recession proof … As more and more people are cutting back on spending money, gaming is becoming more and more popular as people are going out less and spending a lot more time at home and saving money AND having a great time while doing so. I like Activision and believe it to be a good buy.

decrooj pointed in the same direction and gave color to the synergies of last year's big merger, writing:

Merger with Blizzard is huge. It will do the exact opposite of [Sirius XM (NASDAQ:SIRI)] merger. With blizzard they gained the [revenues] brought in by online subscriptions. Online gaming is not a fad, I think it will be here to stay for a while. With all of the new titles coming out this year I only see big dollar signs for the company. They have a contract with [Marvel (NYSE:MVL)] which could also lead to more money in the future. Big Franchise Games. All of this money will lead to [Activision Blizzard] buying out more companies and eventually becoming a near monopoly in the future.

Of course, the main worry about Activision's future is fear of falling into one-hit-wonder status if games such as its tremendously popular Guitar Hero start to fizzle. It's a legitimate concern. Does anyone play Sonic the Hedgehog anymore? Didn't think so.

A few reasons these fears may be overblown are explained by acknowledging Activision's key strengths, mainly:

  • Incredibly well-capitalized with no debt, providing durability in this economy.
  • A market-leading brand name that will attract the industry's most creative gaming talent for years.
  • Insightful management that realizes how destructive being a one-hit wonder can be, so joining forces with a company like Blizzard made sense.

At $9 a share – more than $2 of it in cash -- Activision Blizzard looks like a best-of-breed stock trading at a pretty compelling value. That's why more than 97% of those members in our CAPS community rating this stock feel confident enough to tag it as an outperform, as well as give it five-star status.                                                                                 

You take it from here
Disagree? See it another way? Just want to see what the rest of the pack is saying? More than 125,000 investors use CAPS to share ideas and swap opinions. Click here to check it out. It's 100% free to join.

For further Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. LoopNet is a Motley Fool Hidden Gems and a Motley Fool Rule Breakers recommendation. eBay is an Inside Value selection. Marvel, eBay, and Activision Blizzard are Stock Advisor picks. The Fool owns shares of Autodesk. Long story short, the Fool has a disclosure policy.