US corporations have never been richer, a true dichotomy when compared to the general population. Due to productivity gains, corporations do not need to ramp up on employment in order to maximize profits. As such, employment in the US remains stagnant, while cash on hand for our best corporations reaches new heights.
The poster child for cash on hand is AAPL, with their absurd $150 billion in reserves. However, there are many names out there with fantastic balance sheets that are often overlooked.
Using a net cash per share/price ratio inside The PPT, cross referenced with a bunch of other stuff, here are a few that caught my attention.
NTAP
NVDA
MRVL
APOL
KLIC
TIVO
UTEK
AVX
VSH
QLGC
PKE
SWIR
CRAY
Usually stocks with huge cash positions are bogged down, impaired somehow, like MODN. Most of the names above haven’t performed very well, but present an interesting opportunity for activist shareholders or leverage buyout firms. Naturally, they’d want to get their hands on the cash in the form of a special dividend.
Food for thought.
The market looks weak and I am simply a spectator today.
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