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 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-Year CAGR, %

CAPS Rating
(Out of 5)

Akamai Technologies (NASDAQ:AKAM)



GameStop (NYSE:GME)



MasterCard (NYSE:MA)



salesforce.com (NYSE:CRM)



Sears Holdings (NASDAQ:SHLD)



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.

One thing that happens when you make money hand over fist is competitors are attracted to your niche like moths to a flame. Network services provider Akamai Technologies might be the best stock to buy this year because it not only generates prodigious amounts of free cash flow, but revenues and profits have also followed this northward trajectory over the past five years.

Which means rivals like Limelight Networks and Amazon.com (NASDAQ:AMZN) want to horn in on what Akamai's doing, and causing some analysts to express consternation that Akamai's lower-tier customers will defect to the new entrants. Investors like CAPS All-Star member FreeMortal, however, shrug off the chance they'll be able to muscle in very far:

Huge and expensive infrastructure and market share present a fairly deep and wide moat. They are pervasive, yet subtle. Just by cruising the web, your computer will communicate with Akamai servers more than Google.

If Google and Oracle had an 800 pound baby...

More than 2,700 CAPS members have voiced their opinion on Akamai, and 96% of them feel it's going to outperform the market going forward. Head over now to the Akamai Technologies CAPS page and let us know whether the network services provider will continue to swing from the trees.

Laughing all the way?
Even if Sears Holdings manages to hang on for another Christmas or two, it's hard to imagine it will be competing in the marketplace from a position of strength. A series of ill-timed choices has eviscerated its customer base and slowly gnaws away at its once-vaunted cash hoard.

But it's equally hard to argue with the fact that somehow, some way, Sears does manage to make money. Not GAAP earnings, mind you, at least not consistently, but free cash flow, and value investors will argue that's the more important number to watch anyway. We'll have to wait to see how Sears did in the fourth quarter, but in the trailing 12 months ended last October, the hitherto-venerable retailer generated more than $1.5 billion in free cash flow, a hefty increase over the year- ago period.

Yet negative sentiment surrounding Sears is palpable. Fully 30% of CAPS members rating the retailer think it will underperform the market averages, let alone, as JackCaps says, rivals Amazon and Wal-Mart (NYSE:WMT).

It's not all doom and gloom, though. sheltonclan finds the bevy of well-known brands is Sears' saving grace:

Over the long haul, the branding wrapped up in SHLD will pull through. Craftsman, Lands End, Kenmore, DieHard...these are BRANDS people want even if they don't consider themselves "Sears Shoppers." I think Lampert can pull it together.

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.

Sears Holdings and Wal-Mart Stores are Motley Fool Inside Value picks. Akamai Technologies and salesforce.com are Motley Fool Rule Breakers selections. Amazon.com and GameStop are Motley Fool Stock Advisor recommendations. 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 other stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.