20 Stocks with High Net Cash

Companies with large amounts of cash have a greater ability to withstand the pressures of a recession and are well positioned to expand their businesses through takeovers if such opportunities present themselves. However, we believe that an analysis of a firm's cash position would be incomplete without also considering their debt burden. As a result, we have conducted a study of firms with large cash on hand and subtracted total liabilities to determine their net cash position. More precisely, we define the net cash position as Cash & Equivalents + Short-Term Investments - Total Liabilities.

The list below shows 20 of the largest firms with high net cash. These stocks should not be blindly purchased. Rather, investors can use this list as a starting point. Ideally, investors should try to determine what growth opportunities are available to these firms if that is possible. If growth opportunities exist (i.e. there are potential takeover targets) within their respective industries, then the excess cash (possibly combined with additional debt) can be put to good use. In addition, investors should consider valuations, qualitative factors along with industry competition.

20 Stocks With High Net Cash

Company Name	Ticker	Net Cash (in $Mil)	Market Cap (in $Mil)	Ranking System
Google Inc.	GOOG	14120	123832	Hold/Sell
Apple Inc.	AAPL	5769	109912	Strong Buy
Cisco Systems, Inc.	CSCO	4957	105008	Strong Buy
QUALCOMM, Inc.	QCOM	2691	67595	Strong Buy
Franklin Resources, Inc.	BEN	1988	14194	Hold/Sell
Forest Laboratories, Inc.	FRX	1327	6931	Strong Buy
Celgene Corporation	CELG	1268	17597	Strong Sell
Broadcom Corporation	BRCM	1112	11262	Sell
Adobe Systems Inc.	ADBE	1107	12948	Strong Buy
IAC/InterActiveCorp	IACI	1048	2352	Strong Sell
Yahoo! Inc.	YHOO	1013	20063	Hold/Sell
Juniper Networks, Inc.	JNPR	906	9662	Buy
Analog Devices, Inc.	ADI	775	6235	Buy
Sycamore Networks, Inc.	SCMR	753	852	Strong Sell
Tellabs, Inc.	TLAB	670	1943	Hold/Sell
Hilltop Holdings Inc.	HTH	492	650	Hold/Sell
Maxim Integrated Products Inc.	MXIM	457	4443	Hold/Sell
Gen-Probe Inc.	GPRO	449	2460	Hold/Sell
FormFactor, Inc.	FORM	443	979	Strong Sell
NVR, Inc.	NVR	418	2857	Buy

*Cash & Equivalents + Short-Term Investments - Total Liabilities
**Our Proprietary Recommendations

The fourth column in the table above shows our Ranking System's buy/sell recommendations (for more information about our Ranking System please visit our website). According to our Ranking System, AAPL, CSCO, QCOM, FRX, and ADBE should outperform the broad market over the next 3-12 months.

Disclosure: No positions at the time of writing.

Comments

[waterman:]

can't you format your numbers so they are easily readable and comparable in the columns?

i.e. use dollar signs, commas and right justification

Apr 23 09:28 AM

[Zoltan L. K...:]

Apple is second, that's great. I agree with ranking system in their case, especially if you take margins and potantiol international penetration into account.

Apr 23 11:25 AM

[ArtfulDodger:]

Good nest of strong-buy stocks. Thanks.

Apr 24 05:04 AM

[Chris B:]

Then again, all that cash isn't earning anything. Don't get me wrong, cash is certainly necessary to have a stable business, but keep in mind that as an investor, you are buying that cash when you pay for shares, then you're covering payroll for a whole corporation to sit on it for you. If the money isn't spent to produce revenue, your investment loses value.

I would ask exactly how these companies plan to use their cash to generate growth in the future. Will Apple invest in economies of scale to reduce the prices of their excellent computers? What is Google's plan to revolutionize how we retrieve INFORMATION, rather than just word matches from the Internet? Is Forest Laboratories going to raise their R&D budget?

A big cash cushion might prevent a company from going bankrupt within the next couple of years, but only a solid business plan will prevent them from burning through all that cash and making losses. How much cash was GM sitting on 5 years ago?

Apr 24 03:17 PM