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When I'm screening stocks, and primarily tech stocks, I always pay very close attention to the amount of debt the company is carrying. In this screen, of two major search engines, I wanted to establish a debt to total cash ratio. That ratio is simply formulated by taking the company's debt and dividing by the total cash. I consider any ratio under "1" very healthy, under "2" satisfactory, under "3" cautionary, and anything over "3" a warning sign.

Symbol

Price

Mkt Cap

Total Debt

Total Cash

Ratio

YHOO

15.75

19.24 B

40.0 M

2.21 B

0.018

GOOG

586.01

191.60 B

7.71 B

47.62 B

0.162

Yahoo, which trades in a 52-week range of $11.09/share (52-week low) and $16.79/share (52-week high), has a market cap of $19.24 billion, was given a rating of a "1," based on the statistical calculations of my formula. YHOO currently has $2.21billion in total cash on its books (it should be noted that the company currently has $1.42 billion in operating cash flow, and $576.85 million in free cash flow) and only has $40.0 million in total debt. That equates to a total debt to total cash ratio of 0.018, which in my opinion, is a very positive catalyst moving forward. Recently trading at a 2.3% premium to its 200-day moving average, YHOO has been reiterated as a Buy at the Street.com and is due out with earnings July 17th.

Google,, which trades in a 52-week range of $480.60/share (52-week low) and $670.25/share (52-week high), has a market cap of $191.25 billion, was given a rating of a "1," based on the statistical calculations of my formula. GOOG currently has $47.62 billion in total cash on its books (it should be noted that the company currently has $15.09 billion in operating cash flow, and $8.36 billion in free cash flow) and only has $7.71 billion in total debt. That equates to a total debt to total cash ratio of 0.162, which in my opinion, is a very positive catalyst moving forward. Recently trading at a 3.5% discount to its 200-day moving average, GOOG announced that it would settle with Apple regarding the bypassing of user initiated privacy settings.

Based on my calculations, both companies are currently carrying a debt load that is considered to be very healthy based by the standards I have established. On a secondary note, Yahoo is expected to grow 27.8% for the quarter and Google is expected to grow 15.8% for the second quarter. With positive expectations for both companies in terms of growth and the minimal debt each firm carries, a long-term position at current levels looks very promising.

Source: 2 U.S. Based Search Engine Providers With Minimal Debt That I'm Considering A Position In