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 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 160,000 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)

Continucare (NYSE: CNU)



Dynamic Materials (Nasdaq: BOOM)



The Knot (Nasdaq: KNOT)



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.

A sizzling opportunity?
The wild card for outpatient services provider Continucare is the impact Obamacare will have on performance. While the president vilified insurance industry giants like UnitedHealth (NYSE: UNH) and Aetna (NYSE: AET) as the root cause of what was wrong with the system, his reforms will fall heavily on providers like Continucare, which rely upon the Medicare Advantage program that will bear the brunt of spending cuts.

Continucare has been able to generate healthy cash flows through a combination of effective utilization management, improved medical loss ratios, and a clean balance sheet. But the three primary HMOs Continucare is affiliated with account for almost half the Medicare Advantage participants in the markets it serves. Obamacare freezes program rates in 2011 and then cuts them afterwards.

Uncertainty about Obamacare's impact led to a decline in Continucare's stock, but highly rated CAPS All-Star member TSIF believes Obamacare may ultimately be more of a benefit to the outpatient services provider:

The catalyst for the drop appears to be the usual culprits in the health care field, the governement, and uncertainty in Medicare. I tend to believe that the health care bill will have more positive attributes than negative for companies such as Continucare. Compared to other companies in the medical service industry it has better than average margins, 6.5% profit and 10% operating; very solid ROA/ROE of 16% each; and what's unusual for this industry, no real DEBT! 

The head of the class
The strong rebound into expansion territory by the ISM manufacturing index should be a signal that Dynamic Materials will see greater demand for its primary explosive metalworking services. So far the division has witnessed sales get cut in half while operating income was slashed 87%. Management is looking for momentum in capital spending projects to bolster business and point to the slight increase in backlog it experienced.

The one bright spot was its oilfield products, where it competes against Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB). Even excluding an acquisition it made late last year, revenues rose 4%, though the segment still recorded an operating loss.

Yet it's the unique nature of what they do -- using explosives to weld metal together -- that interests investors like CAPS member wildonewins:

Only company available to do the work they do and at a price I believe to be way undervalued. When the economy just starts to recover watch this baby excell.

Coming untied
Weddings are an expensive affair, but the recession isn't helping online wedding services provider The Knot prepare many platinum events these days. While it made the best of a knotty situation last quarter, earnings are scheduled for release tomorrow. Rough diamond giant DeBeers reported in March that first-quarter sales surged five times higher than the year-ago period, which might suggest there were at least a few marriage proposals that helped fuel that drive.

With 93% of the 611 CAPS members rating the wedding planner to outperform the market, it's a good bet they're not tied up in knots over its future.

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 roll in the dough.

UnitedHealth Group is a Motley Fool Inside Value pick and a Motley Fool Stock Advisor selection. The Knot is a Motley Fool Rule Breakers recommendation. Dynamic Materials is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Dynamic Materials and UnitedHealth Group. Try any of our Foolish newsletter services 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.