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 in 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 themselves 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 free cash flow growth rates exceeding 25% annually over the past five years. Then we'll pair them with the opinions of the more than 145,000 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-Yr. CAGR, %

CAPS Rating (out of 5)




Hewlett-Packard (NYSE:HPQ)



Skyworks Solutions (NASDAQ:SWKS)



Smith Micro Software (NASDAQ:SMSI)



Synaptics (NASDAQ:SYNA)



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 these companies' piles of cash.

With the surprise announcement that Hewlett-Packard would buy 3Com (NASDAQ:COMS), the computing giant looks like it's set to deliver on its potential to grow its service, storage, and networking lines of business. It is ready to challenge both Cisco (NASDAQ:CSCO) and IBM (NYSE:IBM) while delivering improved revenue growth and margins to shareholders, though not everyone thinks it's capable of that feat.

CAPS member bullet87 sees Hewlett-Packard differently, however, believing the company has the right leadership to see it through:

Mark Hurd continues to make all the the right strategic moves while keeping a lid on costs. He truly is a great corporate leader, visionary and steward of shareholder capital. I would add Jim Cornelius from Brristol-Myers Squibb to that unfortunately abbreviated list as well.Unfortunate because there aren't enough leaders like them.

Sometimes it pays to be a fast second. Imitation is truly the greatest form of flattery as HP imitates IBM in the services business. Now they have upped the ante by entering into the networking fray. Lookout Cisco! HP's foreign exposure will help it too as it translates stronger foreign currencies into weaker dollars. It's a safe play on China as well.

Putting Cisco in its crosshairs is certainly a motivator of H-P's 3Com purchase, but the company's acquisitions in the cloud-computing market show it has no intention of ceding ground to IBM in services, either. Add in a stock buyback program, and it might not be so crazy for Hewlett-Packard to put those cash streams to work.

Pie in the sky
CAPS members also feel that Skyworks Solutions is at the forefront of a convergence that could lead the company to explosive growth. With 93% of the CAPS community rating the analog and mixed-signal semiconductor provider to outperform the market, bdhenders1 foresees Skyworks benefiting from the uptake under way in the mobile Internet, as well as gains in smart grid technology:

Skyworks Solutions is at the crux of the burgeoning mobile Internet sunami. They also have components that go into smart grids, so these two growth drivers should power the stock higher.

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 that you think will continue to be rolling in the dough?

Costco is a Motley Fool Stock Advisor recommendation. Costco and Wal-Mart are Motley Fool Inside Value picks. The Fool owns shares of Costco. Try any of our Foolish newsletter services today, free for 30 days.

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