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 into 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 to be 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 whose compounded free cash flow growth rates exceeded 25% annually over the past five years, then pair them with some opinions from 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)

Hewlett-Packard (NYSE: HPQ)



Rambus (Nasdaq: RMBS)



Smith Micro Software (Nasdaq: SMSI)



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 printer-and-ink cartridge model has been a big profit center for Hewlett-Packard and Lexmark (NYSE: LXK) over the years, as the rising cost of consumables allowed them to give away printers. Eastman Kodak (NYSE: EK), which is an otherwise fading brand, tried to flip that dynamic on its head by selling printers at a slightly higher cost, but dramatically lowered the cost of ink cartridges. Although Kodak increased sales of its printers and related consumables by 57% in 2009, most consumers still don't think about the total cost of ownership until they've already purchased one based on the unit's price, functions, or printing speed.

While the printer industry hasn't been one of real innovation for a while, HP may have hit on something to really move sales: a platform that can print directly from smartphones, netbooks, and tablet PCs without first having to go through a computer. With all the content we carry around in our pockets now, getting hard-copy access to it immediately seems like it should resonate with consumers.

Maybe HP plans on using the cost savings from its recent job cuts to spur more of that innovation. While CAPS member satheeshj1985 anticipates HP getting leverage over the competition, zaphoy thinks it will ultimately hurt its image despite the technological gains.

Over the long run, HP will continue to be a great company, however they won't have the best customer service, and in an industry that is starting to take a "bend over for the consumer" approach toward customer advocacy, HP is kind of walking in the opposite direction.

The head of the class
There's a long list of tech companies, including Hewlett-Packard, wrapped up in Rambus' patent infringement lawsuit. Although the prime focus is on NVIDIA (Nasdaq: NVDA), whose core business of graphic chips will be greatly affected by the trade commission's decision, the tentacles in the case reach far out into the industry.

The risk for Rambus investors is that its own growth now relies heavily on the outcome as well. When the International Trade Commission announced a two-month delay in its ruling, Rambus shares dropped sharply. Management for the chip designer feels strongly that its position will be vindicated, but investors are divided. CAPS member patentprowler thinks the company may end up having antitrust issues, but wildbillpicstk says much of the consumer technology we have is thanks to Rambus.

Rambus has invented and patented many of the techniques that make computers, cell phones etc. work as well as they do. Cos. have used various legal tactics to avoid paying royalties and delay-Looks like the legal processes are finally going to pay off!

Coming untied
Smith Micro Software has certainly benefited from our addiction to electronic gadgetry. Profits for the mobile device software maker grew more than 400% in the first quarter as strong demand drove sales 26% higher to $29.2 million, the highest in the company's history. Verizon remains one of Smith Micro's biggest customers, no doubt because of its ability to seamlessly switch mobile devices between wide- and local-area networks.

CAPS member powersatch was happy to find Smith Micro.

I've been searching for application software companies in the wireless space and [Smith Micro Software] looks like a good bet.

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.

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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.