"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 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

2009 EPS Estimates

CAPS Rating 
(5 stars max.)


$15.6 billion






$3.22 billion






$632 million






$215 million






$650 million




(ends July 2009)


Data from Motley Fool CAPS and Yahoo! Finance.

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.

Death to eBay?
I understand the pessimism surrounding eBay. Pessimism? OK, let's be real -- hate might be a more appropriate word. Market share is falling. Revenue is falling. Sellers are disgruntled. Trust between customers and the company is waning. It's chaos.

eBay the company is a mess and has its work cut out for it. No one doubts that. Where I think some of the pessimism goes off track is assuming eBay the stock is in equally challenged territory.

The obvious troubles, you see, have been matched with a 56% plunge in the past year and 64% in the past five years. Hence, much, if not all, of eBay's current hiccups are already priced in. CAPS member GraemesPSP recently elaborated on this apparent value, writing:

A good measure to compare companies is EBITDA/EV,-it's available on yahoo and other sites. ... An EBITDA/EV of about 7 is the norm for a stable, safe, profitable but low growth company. [Amazon (NASDAQ:AMZN)] has an EBITDA/EV of 22. It commands a larger multiple because of its popularity premium ([Apple (AAPL)] had about the same premium at the height of the iPhone craze.)

On the otherhand [eBay] has an EBITDA/EV of 4.6!! 4.6!!! Not 46. ... eBay is not going out of business. I don't care how badly the latest management has run it. They still have one of the biggest brand names in the world. It is in the perfect storm in terms of ideal environments. Stretched consumers looking to lower their costs of goods are going to move toward eBay.

(What I believe GraemesPSP meant was EV/EBITDA. There's also more to read from that pitch.)

Over the next several years, few foresee much in the way of EPS growth. Here's the thing, though: After last year's plunge, zero growth is what this stock is already priced for. On top of the depressed valuation, eBay is pretty well capitalized -- it has 3.2-times as much cash as it does short-term borrowings and no long-term debt at all.

Bottom line: Yes, eBay has its work cut out for it and a tough road ahead. Investors should hardly hope for much growth going forward. But at about $12 a share, it's hard to argue that this stock isn't already priced for doom and gloom. Even if earnings stay flat over the next several years, you're looking at more than 10% earnings yield on a stock that holds more than 20% of its market cap in cold, hard cash. For a company with an iconic brand name, that's about as good as it gets.

Your turn to chime in
Disagree? See it in another light? 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, and almost 4,000 of them have weighed in on eBay. Click here to check it out. It's 100% free to participate.

For further Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Garmin is a Global Gains selection. eBay is a Inside Value pick. The Knot is a Rule Breakers recommendation. eBay, Amazon, and Apple are Stock Advisor recommendations. The Motley Fool is investors writing for investors.