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)

Baidu (Nasdaq: BIDU)



Chesapeake Energy (NYSE: CHK)



Intuitive Surgical (Nasdaq: ISRG)



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?
Even before Google (Nasdaq: GOOG) made the decision to stop doing evil in China by no longer censoring search queries in the country, Baidu was tearing off huge chunks of market share, growing its portion of Internet search revenue to 64% in the first quarter of 2010. According to Chinese market researchers at Analysys, not only did that come at the expense of Google, whose own share of the market fell 30.9%, but also Sohu.com (Nasdaq: SOHU), which saw its slice of the pie at Sogou drop to a minuscule 0.7%.

Part of Baidu's subsequent gain was no doubt a result of uncertainty surrounding what would happen with its search rival as ad sellers migrated their dollars to Baidu in anticipation of a tumult. With the situation have played out, we'll probably see Google regain some lost territory, but Baidu will have still gained a lot of real estate.

Yet CAPS member tab66 says even with the Chinese search engine getting the lion's share of Google's market, valuation remains important:

Too far, too fast. Great long term potential but even if it takes Google's share of the Chinese market and it will take some, the valuation is too great. Expect to see a significant slip back

The head of the class
Maybe not everyone hates gas at the moment, but there's been enough of a stampede into the oil fields by gas players SandRidge Energy (NYSE: SR), EOG Resources (NYSE: EOG), and others to suggest a deep dislike. With the spread between oil and natural gas prices running at around 19-to-1, there's little wonder why the CEO of even the gas industry's leading producer, Chesapeake Energy, says, "the economics just compel you to look for oil rather than natural gas right now."

But CAPS member hybridinvestor makes the case that all might not be what it seems in the gas industry, suggesting that the divergence between the two fuels might not be sustainable:

Very bullish long-term on natural gas and CHK is about as close to a pureplay as you get in it. Like many issues related to natural gas and will accumulate on this dip. Also per recent findings natural gas inventories are overstated and as clean of an energy source as it is it will continue to be a fuel of choice and the U.S. has plenty of it.

Eye-popping results
When you occupy a unique space as Intuitive Surgical does, having no direct competition in producing a surgical assistance device that hospitals really, really want, it's hard not to get a prognosis that this is a long-term winner. Even as hospitals pull out of a self-imposed capital spending freeze, Intuitive Surgical was able to post results that sliced through analyst expectations.

CAPS member buddylee59 thinks it will be years before competitors can catch up to it, while salomonadelquis likes the way it operates in its niche:

I think this company has created a competitive advantage for its own, that has no peer competition. It's extremely well run with almost no debt and is satisfying one a need for new ways of surgery that is in demand more and more. Future potential is very high.

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.

Chesapeake Energy is a Motley Fool Inside Value selection. Baidu, Google, Intuitive Surgical, and Sohu.com are Motley Fool Rule Breakers picks. The Fool owns shares of Chesapeake Energy. 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.