3 Beaten-Down Stocks With Huge Reserves

S&P 500 companies have never held more cash than they do today. Microsoft (MSFT: 23.27, +0.11, +0.47%), Cisco Systems (CSCO: 21.13, -0.13, -0.61%), Google (GOOG: 436.55, -2.94, -0.66%) and Apple (AAPL: 246.94, -1.54, -0.61%) together sit on more than $128 billion in cash and short-term investments. More than two-thirds of countries don't make that much in a year, counting wages and profits for all of their citizens and companies.

Such hoarding generally serves stock investors poorly. They should receive larger dividends, but instead they are left to hope that before the money is wasted it's spent on something that results in a higher share price. However, at the moment, mountains of cash might give confidence to investors who fear another sharp market decline. In a downturn, companies can use cash reserves to snap up struggling competitors on the cheap, or to repurchase their own shares.

The three companies below aren't nearly as dominant as the aforementioned ones, and two are struggling to compete with them. What they have going for them is that their cash reserves are huge when calculated as a percentage of their stock market values, and that they're adding to them by generating abundant free cash from operations. Whether all that financial firepower will be put to good use is unknown, but turnarounds are surely easier when companies can fund them properly without taking on excessive debt. (more)