"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, I've got a good starting point: companies so badly beaten down that just their net amount of cash on hand represents a significant portion of the share price. On a few rare occasions, you're being handed the actual business operations for free -- or at least, close to it.

Using the wisdom of our 130,000-investor-strong Motley Fool CAPS community, I went on a hunt for companies fitting these "scraped-off-the-pavement" 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.

Pretty straightforward. Among others, I came across these five companies:


Market Cap

Recent Price

Total Cash per Share

2009 EPS Estimates

CAPS Rating 
(5 stars max)


$109 billion






$4.1 billion





Lorillard (NYSE:LO)

$11.7 billion





Forest Laboratories (NYSE:FRX)

$6.9 billion





Hansen Natural (NASDAQ:HANS)

$3.9 billion





Data from Motley Fool CAPS and Yahoo! Finance, as of May 15, 2009.   

While Apple might not look like a ridiculously cheap stock at first glance, keep a few points in mind before jumping to conclusions:

  • The cash on its books equals roughly 23% of its market cap, and it's 100% debt-free.
  • It has a history of utterly dominating everything it touches, with the exception of Steve Jobs' wardrobe (which could never innovate past black turtlenecks).

Sure, Apple might not be the cheapest stock in the market, but strip out its massive cash hoard, and the valuation looks quite sensible. Factor in the supremacy it holds in the consumer computing industry, and you wouldn't be crazy to think that this is a great long-term buy.

CAPS All-Star mode7 has some more thoughts on what gives Apple long-term staying power:

Apple has a superior music player, which has been driving it's sales lately. If they can sort out their ideas for planned obsolescence (like not make the new iPod Shuffle need their brand headphones to function well at all) and keep their new App store afloat (keep the programmers making the apps happy and push higher quality pricier apps over the current dime a dozen version) they should be able to do well on just the iPod / iPhone platform itself.  

For growth, they need to start eating into Microsoft's [ (NASDAQ:MSFT)] market with the home PC. They could try a more corporate operating system approach, but Apple's OS X is really more suited to home and personal use. All of these younger folks using iPods now though will eventually have enough disposable income to buy a shiny Apple computer, and the younger more tech savvy crowd is not nearly as intimidated switching operating systems as some of those in the '80s and '90s were.

The Microsoft vs. Apple comparison often looms large in investors' minds, frequently boiling down to which company will eventually force the other into oblivion. Investors typically side with Apple, which has innovated its way to superiority with the iPod and iPhone.

But does this really spell doom for Microsoft as well? Can't both companies thrive in the long term? I don't see why not. While the industries are vastly different, Apple vs. Microsoft might end up being similar to Visa (NYSE:V) vs. MasterCard (NYSE:MA), where two companies in a deeply competitive industry both thrive simply because barriers to entry prevent further competition from ending the fun. 

Microsoft dominates office software; Apple owns consumer devices. They're both incredibly profitable, and they're both cash-rich. Welcome to the land of duopolies -- it ain't a bad place to be an investor.

You take it from here
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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Apple and Priceline.com are Motley Fool Stock Advisor recommendations. Microsoft is an Inside Value selection. Hansen Natural is a Rule Breakers pick. The Fool has a disclosure policy.