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3 Tech Stocks Generating Tons of Cash

FB Cash from Operations (TTM) Chart

When it's all said and done, the present value of every asset is a function of estimated cash flows in the future. So, investors are always trying to put a finger on how well a company can generate free cash flow. Given the importance of future cash flow in justifying a company's stock price, it's a good idea to flip over to its cash flow statement and do some simple analysis to see if cash flow is looking good or not.

Sure, for fast-growing companies in nascent industries, meaningful cash flow could be years out as cash is reinvested into growth initiatives. But for more mature companies, it's always great to see some good ol' green. After all, it stands to reason that the companies most likely to generate boatloads of cash for investors in the future are those who have consistently generated boatloads of cash in the past.

On this note, here are three companies with an uncanny ability to generate cash for investors.

FB Cash from Operations (TTM) Chart

FB Cash from Operations (TTM) data by YCharts .

Considering relative cash flows can also enable investors to find undervalued stocks or stocks that aren't as highly valued as they might appear. That's because the most commonly used valuation metrics, such as the price-to-earnings ratio, are based on reported earnings or net income.

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The article 3 Tech Stocks Generating Tons of Cash originally appeared on Fool.com.

Daniel Sparks owns shares of Apple. The Motley Fool owns and recommends Apple, Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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