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 a company's ability to generate cash -- what comes in the register and goes out the door -- remains the preeminent indicator of that company's worth. In short, cash is king.

Below, we'll look at companies that have proved themselves to be prodigious generators of free cash flow (FCF) -- the amount of money a company has left over that it could potentially pay to its investors. We'll find companies that have generated compounded FCF growth rates exceeding 25% annually over the past five years, and then we'll pair them with the opinions of the more than 140,000 members of the Motley Fool CAPS investor-intelligence community, to see which ones might have the best chance of outperforming the market.


Levered FCF 5-Year CAGR, %

CAPS Rating (Out of 5)

American Science & Engineering (NASDAQ:ASEI)



Cenveo (NYSE:CVO)









Quiksilver (NYSE:ZQK)



Source: Capital IQ, a division of Standard & Poor's; 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.

It might be working all the livelong day, but railroad operator CSX might find it's going to run off the tracks as consumer spending remains constrained and a lack of new-car sales diminishes the need for moving freight with containers.

Earlier this month, CSX, Norfolk Southern (NYSE:NSC) and Burlington Northern Santa Fe (NYSE:BNI) happily reported that volumes improved in August on higher auto and agricultural shipments while a nascent economic recovery would allow them to raise prices in the months ahead. CAPS member geradc says CSX will move full steam ahead as more products need to get shipped.

Even as it takes a lot to bring a moving train to a standstill, the railroad execs might want to reconsider whether the small bump they witnessed means the economy is building up a head of steam. Rail volumes have fallen by 20% so far this year, and despite the uptick, the spike they've witnessed in auto traffic on their lines isn't likely to be repeated anytime soon. The "Cash for Clunkers" frontloaded sales to August, leaving car dealers wondering where they'll find buyers now, though maybe the "Cash for Refrigerators" program -- yes, we're handing out tax dollars for that, too -- can keep the trains rolling.

Cost controls have helped CSX weather the economic storm thus far; it has idled 16% of its engines and nearly a third of its coaches. Yet it needs to look to the future too, so it's investing $1.6 billion in rail-line upgrades. Analysts like it that its operating ratio of 73% -- the percentage that operating expenses consume revenues -- is lower than either Burlington's or Norfolk's, and that it has kept profits intact as a result. Gmoney91 says the company is positioned well for future growth.

Though earnings have diminished a little the past year, CSX is a great company to buy at the trough of the recession. The company has made great cost control decisions in recent quarters. This has kept earnings respectable and put the company in a great position looking forward. CSX has either met or beat earnings in the last seven reporting quarters. I look for the company to make a great comeback in the next few years.

Maybe this is the way to run a railroad.

Follow the money
What's your view? 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 that you think will continue to be rolling in the dough.

American Science & Engineering is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.