Maximus

The 15 Most Cash Rich Companies

Great article and great comments.

I agree about the technology companies and the downside in a shrinking economy. I looove Apple but just can't buy it. Google is the only safe bet of the bunch due to its near-monopoly status in a growing market.

Given the inflationary course clearly being pursued by the Fed, I think it is time or the time is soon to come when cash is no longer king and we need to get everything out of greenbacks and into investments that will maintain their value in an inflationary context.

My main concern right now is finding companies -- in addition to natural resource ETFs and stocks -- whose market value will rise along with inflation and a declining dollar.

These companies should possess wide-moats (near monopolies or with strong competitive positions), easy-to-understand business models, high ROEs, low business risk and low debt (all Buffet/Morningstar critieria).

I have just begun this exercise using Morningstar data by screening Morningstar's wide moat, low business risk, five-star stocks (stocks with a large margin of safety) but have not yet examined cash, debt, debt-to-equity ratios, ROE, etc.

One extremely interesting company is Landstar System (LSTR).

Here is the list of other wide moat companies that I will examine for ROE, cash and debt levels (note there is some overlap):

Procter & Gamble Company PG
3M MMM
Abbott Laboratories ABT
Alcon, Inc. ACL
Boardwalk Pipeline Partners LP BWP
Buckeye Partners, L.P. BPL
Campbell Soup Company CPB
Coca-Cola Company KO
Colgate-Palmolive Company CL
ExxonMobil Corporation XOM
Fastenal Company FAST
International Business Machine IBM
John Wiley & Sons, Inc. JW.A
Johnson & Johnson JNJ
Kinder Morgan Energy Partners, L.P. KMP
Magellan Midstream Partners, L.P. MMP
Medtronic, Inc. MDT
Microsoft Corporation MSFT
McDonald's Corporation MCD
Novartis AG NVS
PepsiCo, Inc. PEP

Comments about these companies very welcome...

On Mar 15 12:33 PM MDLGTO wrote:

> Good starting point. I agree with other posts that cash flow per
> share would be a helpful measure AND that Net Cash/Debt is more important.
>
>
> With regard to specific stocks:
> AAPL garners a majority of revenue from Laptops and Ipods (macworld
> pie chart www.macworld.com/artic...)
> -IMHO these sales will evaporate along with other consumer disc.
> purchases. I think will crash hard. AND without Jobs, even more so.
>
>
> MSFT, as noted, cash rich for a long time--have really not gotten
> any traction with new products svcs-dependent on win/office. Some
> possible good news is that I THINK that companies will prefer to
> bleed a little w/ new licenses rather than take a large capital investment
> on low cost solutions (linux/google apps)--cap ex is in training/IT
> that can handle these jobs
>
> GOOG is VERY interesting 0 debt. Still a bit overpriced, But will
> continue to innovate (lots of blah blah about innovation in crisis
> type articles are around), advertising continue to shift to web (more
> cost effective and goog owns this arena). GOOG is the microsoft of
> tomorrow.
>
> I think PHARM is much maligned. Think about it people. For all the
> flak that Obama gets (I'm a liberal), He won't be able to change
> the system--look what happened under Clinton--A lot of talk, no change.
> AND Boomers are just now striding into their peak Medication years!!!
>
>
> BRK is, I think, a Buffet/munger vehicle-old guys whose active investing
> longevity won't outrun this downcycle.
>
> XOM etc. Great company, probably overvalued. I'd look at historical
> Oil prices--Even $30/bbl is avg/high in inflation adjusted terms.
>
>
> INTC-Not sure how their other lines stack up, but i'd guess worldwide
> chip demand is going to be neg/flat for a while.
>
> CSCO-Not great equipment, but Corps will need to maintain network
> status quo.
>
> HQP odd chimera of IT. Consumer sales will be neg/flat. I'd think
> their best days are over
>
> IBM as a friend wrote to me "we're outsourcing everything that's
> not bolted down" IBM should be able to capitalize on that
>
> TOM-Think consumer capital expenditures will not be great for some
> time.
>
> So, This is my 2 min Cramer exercise--look at IBM, GOOG, and pharm.
> I'd also be interested in Consumer Staples that have strong balance
> sheets/ low debt/equity ratios--Help me people!! Most consumeer staples
> seem to be too highly leveraged.