5 Cash-Rich Companies at Bargain Prices

"I don't look to jump over seven-foot bars: I look around for one-foot bars that I can step over." 
-- Warren Buffett

If you're in the market for those one-foot bars Buffett loves, I've got a good starting point to begin your hunt: companies beaten to such a pulp that just their net amount of cash on hand represents a significant portion of the share price. On a few rare occasions, you're being handed the actual business operations for free -- or at least close to it.

Using the wisdom of our 130,000-investor-strong Motley Fool CAPS community, I went on a hunt for companies fitting these bargain-basement criteria. Specifically, I looked for:

• Estimates of profitability in 2009.
• No long-term debt.
• A high level of total cash in relation to current share price.

Pretty straightforward. Among others, I came across these five:

Data from Motley Fool CAPS and Yahoo! Finance.  

These aren't necessarily formal buy recommendations -- just a good starting point for more research.

Dr. Roboto will see you now
Robotic surgery means smaller incisions, fewer complications, and better outcomes. And Intuitive Surgical is a pretty cool business.

I've always appreciated the innovation and potential of this company, but couldn't muster enough strength to pay the ghastly prices it commanded. While I've yet to pull the trigger, the numbers are starting to look pretty compelling after the 68% plunge shares have undergone over the past year.

At $90 a share -- more than $11 of it in cash -- you're looking at a company with the world ahead of it that’s trading at around 15.4 times forward earnings when you strip out the cash. Here's what CAPS member and fellow Fool writer David Mock (TFMBeachBum) recently wrote about Intuitive Surgical's near-term prospects:

There's just too much to like about [Intuitive Surgical] at this price. Near-term pressure on system sales will eventually ease, as the economics for hospitals are too compelling. In the meantime, recurring revenue keeps things humming along as the company continues to develop new opportunities.

Recurring revenue accounts for 48% of total revenue, which is a comforting prospect amid an economic panic that’s causing hospitals to temporarily hunker down and eschew growth.

iValue
I like Microsoft (NASDAQ:MSFT) because it's a solid company with a fortress-like balance sheet being somewhat arbitrarily punished with the rest of the market. For the exact same reasons, I have a hard time not liking Apple. It's oozing with cash, debt-free, and -- while not as scalable as Mr. Softy -- holds a place in the minds of millions who'll give an arm for any gadget with an "i" in front of the name. As CAPS member JaguarBank recently wrote:

A solid company! I believe they would perform at a higher level with Jobs in control but they have a solid amount of intellectual wealth in their engineers and product managers. A new Iphone in 2009 should provide additional compatibility and security for business users that may take a bigger chunk out of [Research In Motion's (NASDAQ:RIMM)] Crackberries.

As a "keep-it-simple" investor at heart, I couldn't help but enjoy the simplicity behind jester112358's recent Apple rundown:

These guys are sitting on $25B in cash and no debt (about 25% of the share price). Great situation to be in in a credit crunch. Great products with great margins anchored by great management.

Investor, meet one-foot bar.

Your turn to chime in
Disagree? See it in another light? Just want to see what the rest of the pack is saying? More than 130,000 investors use CAPS to share ideas and swap opinions. Click here to check it out. It's 100% free to participate.

For further Foolishness:

• Rule No. 1: It's OK to Lose Money
• This Is Why Buffett's Buying Stocks