Companies Hoarding Cash
Senior Field Producer
Companies have been hoarding more cash more than ever due to concerns over a double-dip recession and uncertainties in the environment.
Brent Wilsey, President of Wilsey Asset Management and CNBC Senior Stocks Commentator Herb Greenberg joined Maria Bartiromo on the Closing Bellgiving their insight on companies with big dollars on their side.
Clinging Onto Cash
US companies are hanging on to more cash on their balance sheets than at any other point on record. Widely held names likes General Electric (parent of CNBC), Cisco Systems, Microsoft, Ford and Google are all companies with cash on the balance sheets.
Wilsey says there are opportunities with Google, Exxon, Amgen and Humana.
The Low Down on Humana
If you look at Humana over the last twelve months, the healthcare provider brought in $2.1 billion of cash flow.
Wilsey points out that cash the company is sitting on may earn about 0.5% in interest, if that.
Ultimately, Humana will be buying back stock says Wilsey. Acquisitions may also be in the works.
This is a persistent worry about financial markets and about the sustainability of the economic recovery. Wilsey warns that just because a company has lots of cash doesn’t mean it’s a great company to invest it. You need to look closely at the cash flow, says Wilsey.
Crystal Lau contributed to this article.