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 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 amount of money a company has left over after investing in its business that it could pay to its investors. We'll find companies that generated compounded free cash flow growth rates of more than 25% annually over the past five years, then pair them with some opinions from the more than 130,000 members of Motley Fool CAPS to see which ones might have the best chance of outperforming the market.


Levered FCF 5-Year CAGR, %

CAPS Rating  (out of 5 stars)

Actuant (NYSE:ATU)



Carbo Ceramics (NYSE:CRR)



FTI Consulting (NYSE:FCN)






thinkorswim Group (NASDAQ:SWIM)



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 flow 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.

The rumors of Netflix's death have been greatly exaggerated. It seems that every time a rival comes up with some new idea, someone talks about the imminent demise of the online movie-rental company. The latest threat supposedly comes from Red Box, a company that has installed about 15,000 kiosks doling out movies for $1 a day.

Certainly, the money-saving kiosks make it attractive to consumers, enough so that even faltering Blockbuster (NYSE:BBI) signed on for a bromance with NCR (NYSE:NCR) to make an action-adventure play in the kiosk space. But Blockbuster has a history of throwing ideas against the silver screen to see what sticks, which helps explain why it's in such a sorry financial state. Blockbuster hasn't had a coherent plan for counteracting Netflix's value proposition, so its bricks-and-mortar format is dragging it to the brink of oblivion.

Despite the long list of pretenders to the throne, Netflix continues to put stellar earnings into the can every quarter. In the latest quarterly report, the company's profits grew 68% to $22.4 million, on a 21% increase in revenue. Netflix continues to make the service more relevant to its customers: online video streaming, deals to stream video through the Xbox, and even more content through an arrangement with Starz.

Yet being a headliner doesn't always make for a media darling or an investment star. CAPS All-Star danteps, for example, acknowledges Netflix's success, but doesn't like the macroeconomic environment:

The intrinsic value of this equity is significantly below current trading levels. This is a valuation call.

1. The stock is trending downward and off its 52-week high

2. The stock is trading at a 25x P / E multiple and does not have the growth and profitability to justify the multiple

3. There are a number of potential competitors for "media dollars" and with time one may reasonably assume an erosion of Netflix share of these media dollars

4. Consumer discretionary is not where I would want to invest given unemployment trends and broad devaluation of home equity

Enjoyable service; not sure at this price an investment will yield oversized returns vs. S&P.

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. Head over to the completely free CAPS service and let us hear what you've got to say about these or any other stocks that you think will continue to roll in the dough.

Netflix is a Motley Fool Stock Advisor selection and Actuant is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletters today, free for 30 days.

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