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 that metric to mask a company's true operations. Yet the 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 165,000 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)

Cal-Maine Foods (Nasdaq: CALM)



PetMed Express (Nasdaq: PETS)



True Religion Apparel (Nasdaq: TRLG)



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?
Incredible, edible egg producer Cal-Maine Foods benefits when the price of eggs gets high, even if those prices can occasionally get volatile. Yet Cal-Maine also relies on a select group of retailers to move those eggs to customers, with Wal-Mart (NYSE: WMT) accounting for a third of its revenues. Its top 10 outlets, including Winn-Dixie (Nasdaq: WINN) and Costco (Nasdaq: COST), were responsible for 66% of its sales in 2009. Although customer concentration can pose investment risks, Cal-Maine seems to be in no immediate danger of losing any of these outlets.

With 28 million layers, Cal-Maine is the country's largest egg producer, followed by privately held Rose Acre Farms and its 20 million layers. Cal-Maine is also the primary target of a class action lawsuit, alleging that the industry conspired to fix prices between 2004 and 2008, a time in which egg producers claimed that higher feed costs were driving egg prices upward. Feed expenses may have been part of the hike, but documents provided by one of the defendants suggest there was a conspiracy afoot to reduce the number of hens and limit supply.

Still, Cal-Maine's preeminent position in the industry attracts investors like CAPS member xyznth256, who thinks it's trading at a discount:

A well entrenched company, selling at an attractive price. The company's strong vertical and horizontal integration has led it to be the country's number one egg-product distributor.

Sit! Stay! Roll over!
Analysts fear that cutbacks in advertising at PetMed Express -- just as Wal-Mart is cutting its prices on leading pet supplies -- mean the discount medication and supply house could be headed for the doghouse. Competition with industry leader PetSmart (Nasdaq: PETM) is also a concern; the retailer is several orders of magnitude larger than PetMed, and it should be able to more readily meet any pricing pressure.

Yet CAPS members say it's wrong to think that PetMed has gone to the dogs. daodell33 notes that people who regard their pets as family members need a consistent source for discounted supplies and meds:

Further, pet hospitalization, pet insurance, pet care and families need to use interventional medicines on pets is increasing. Last, veterinary hospitals and pet pharma sales forces are less integrated than their human-hospital counterparts making 1-800 Pet meds a very compelling and growing sales channel with a competitive advantage.

This denim looks great
With its jeans selling for hundreds of dollars a pair, no one will confuse True Religion Apparel for a discounter. Nonetheless, CAPS member XMFConnor says its stock is a bargain-basement sale item:

Recommendation: The jeans are expensive, but the shares are cheap. With shares trading below $30, I recommend that we immediately initiate a long position in this growing retailer. The company was resilient during the downturn, but will show its real strength in an economic recovery.

Given its position in the business, with plenty of opportunities for growth, XMFConnor says True Religion has three different levers to pull to continue its success story, any of which will lead to investment profits.

Follow the money
Don't just follow the trail of dollars these stocks have left behind -- 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.

Costco Wholesale and Wal-Mart Stores are Motley Fool Inside Value selections. Costco Wholesale and PetSmart are Motley Fool Stock Advisor recommendations. The Fool owns shares of Costco Wholesale. Try any of our Foolish newsletter services  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 here. The Motley Fool has a disclosure policy.