Biggest Cash Positions of the S&P
Director of Market Data & Content Services, CBNC
Cash is King! Whether you are a bull or a bear, having cash on hand helps companies weather downturns or invest in the future. Even in Thursday's news of GE's joint venture with Comcast to run CNBC parent NBC Universal, the infusion of billions of dollars in cash was one highlight of the deal.
Every sector is different for what is a "normal" amount of cash to have on hand and certain sectors seem to stand out. Even within those and when looked at as a percent of revenue, some companies seem to be sitting on huge amounts of cash. Below are the companies that have cash in excess of 95% of their trailing 12 months of revenue (based on their most recent 10-Qs). Topping the list are tech and healthcare companies. Note that the table excludes financials as banks, by definition, have a lot of cash.
Top Cash Positions on the S&P 500 as a % of Revenue:
For comparison, other tech favorites like Microsoft and Apple have cash at ~65% of their revenues. The average for the overall S&P (ex-financials) is 21%. Consumer staples companies have the least cash on the books with an average of 7% of revenues.
Robert Rabinowitz, CEO of investment firm, JH Darbie & Co. is one investor looking for companies with cash. He has advised clients on buying and owns Microsoft and Advanced Micro Devices , in part due to their cash positions. "Microsoft is sitting on a boat-load of cash which can be used for a multitude of strategic investments and growth initiatives" says Rabinowitz. Likewise, AMD ranks #45 on the S&P in cash and Rabinowitz thinks they will use that cash to gain share from Intel (ranks #61) . He has price targets of $39 for MSFT and $9 for AMD.
On an absolute basis, Bank of America had the most cash last quarter in the S&P, $152 billion. Here are the S&P companies with over $20 billion of cash on their books.
Top Cash Positions on the S&P 500 in absolute dollars: