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 them to mask a company's true operations. Yet a company's 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 proved themselves to be prodigious generators of free cash flow -- 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, and then we'll pair them with the opinions of the 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)

Google (Nasdaq: GOOG)



priceline.com (Nasdaq: PCLN)



Transocean (NYSE: RIG)



Sources: 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?
We get all excited when Google's Android-based phones beat out iPhones or when the company says its going to add a new music service to challenge Apple's (Nasdaq: AAPL) iTunes. We're in heady times when we're thinking its Chrome OS can supplant Microsoft's (Nasdaq: MSFT) Windows or its Docs cloud can rearrange the Office furniture. Yet when we come right down to it, we need to keep an eye on Google's advertising capabilities, because that's Google's moneymaker: 97% of its revenues come from ads. The rest is window dressing.

Now to a certain extent, there's a synergistic relationship between all of these lab creations and Google's ability to sell ads on its search engine. That feeling of ubiquity -- Google Everywhere -- helps the brand sell ad space. But let's not lose sight of the fact that search capabilities are the engine driving this cash-generating machine.

CAPS member a2investments hasn't, pointing to Google's endless cycle of hits in elevating it to outperform the market.

Currently undervalued with a PEG under 1. Google's moat in search will only widen, because of the nature of search algorithms, which learn from their users. The more clicks --> better results --> more clicks (and ad revenue) --> better results etc. in an endless loop. For competitors, the game is already lost. Android phones and cloud computing are next. 27B cash ($83/share), no debt. Google's only predators at this point are governments.

The head of the class
The growing importance of priceline.com's international travel business partly explains the collapse its share price has suffered over the past two months. The international segment accounts for 61% of its gross bookings and three-quarters of its operating income. Goldman Sachs notes that half of priceline's revenues are tied to the euro, so when the currency also collapsed in the face of rising concern over sovereign debt, a hit to the travel agency's bottom line is to be expected. But Goldman doesn't think a 10% drop in the euro equates to a 30% decline in priceline's stock.

I'm inclined to agree, more so because there's a growing component of its business tied to Asia, not Europe. When international books soared 73% last quarter, a good portion of that was due to the strength of its Agoda Asian business. eLong, the Chinese travel subsidiary of Expedia (Nasdaq: EXPE) -- which owns a 20% stake in it -- expects second-quarter revenues to grow by 25% to 35%.

It was the potential for priceline's international business that had CAPS All-Star HLChin highlighting it as a candidate for growth.

Reasoning: Business
• Booking.com was acquired by Priceline in 2005. Booking.com's worldwide hotel count exceeds 71,000 hotels in over 70 countries. Europe hotel's are fragmented, made out of smaller hotels and booking.com provides access to them
• In 2008, Priceline acquired Agoda.com which has helped boost business in Asia

Coming untied
Although Transocean's name may be as sullied as the Gulf of Mexico because of the disaster there, it really can't be blamed for the actions BP (NYSE: BP) took while it was using its Deepwater Horizon rig. Although there's a moratorium in place (or not, after a judge imposed an injunction), Transocean's other rigs will be in demand in other parts of the world where deepwater drilling is still seen as a necessity.

As CAPS member billehart notes, the vast bulk of the liability will lie with BP, and the sell-off Transocean's shares endured provides a good entry point for investors into this deepwater leader.

Follow the money
These stocks have left a trail of dollars, but 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. 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.

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers pick. Apple and priceline.com are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey has no financial position in any of the other stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.