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 it to mask a company's true operations. Yet its ability to generate cash -- what comes into 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 to be prodigious generators of free cash flow (FCF) -- the money a company has left over that it could pay to its investors. We'll find companies with compounded free cash flow growth rates that exceeded 25% annually over the past five years. We'll pair those with opinions from some of the more than 130,000 members of the Motley Fool CAPS investor intelligence community to see which companies might have the best chance of outperforming the market.


Levered FCF, 5-Year CAGR, %

CAPS Rating (5 Stars Max)




Pharmaceutical Product Development (NASDAQ:PPDI)



PPG Industries (NYSE:PPG)



Southern Copper (NYSE:PCU)



St. Jude Medical (NYSE:STJ)



Source: Capital IQ (a division of Standard & Poor's) and 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 the piles of cash.

Don't do as action hero Jason Statham does in the latest Crank movie and hook yourself up to a car battery for a jump start. If your heart is wearing out, you're better off supplementing it with a pacemaker from St. Jude Medical.

Big-ticket medical device makers like Intuitive Surgical (NASDAQ:ISRG) are feeling the effects of capital spending cuts at hospitals. The robotic surgical system maker sold fewer machines in the first quarter, though revenues from its installed base of machines show the value of recurring revenue streams. St. Jude Medical offers lower-cost items like implantable cardioverter defibrillators, or ICDs, so it isn't hurting as much, while slipups like the recall of Medtronic's (NYSE:MDT) implantable defibrillators two years ago have allowed it to steal market share.

Even with today's earnings results showing first-quarter profits 14% higher on $1.13 billion in sales, analysts are expecting a 9% increase in earnings this year and a 14% increase for 2010. That's why CAPS member buzzstocks was bullish on St. Jude Medical, saying just the other day that the company was safe from market volatility.

Life-saving devices that target heart disease. Higher than expected Q3 sales, and well insulated from macro turmoil.

Not that the stock is cheap. At 30 times trailing earnings and nearly three times sales, you might balk at paying such a premium. However, the medical appliance sector as a whole sports some lofty values, and St. Jude Medical is a better bargain when you look forward. The biggest risk is that more than 60% of its revenues come from cardiac rhythm management -- ICDs and pacemakers -- and as Medtronic showed, a flaw could lead to trouble.

Follow the money
While these stocks have left a trail of dollars, 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. Why not head over to the completely free CAPS service and let us hear what you've got to say about these or any other stocks?

Intuitive Surgical is a Motley Fool Rule Breakers pick, Pharmaceutical Product Development is a Stock Advisor recommendation, and PPG Industries is an Income Investor selection. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.