The greatest divergence between the intrinsic value of a company and its market capitalisation is found when there is a great amount of fear and panic in the market. Due to the recent carnage, many companies have seen substantial erosion in their market cap and to find some ‘bargains’ we looked at debt-free companies sitting on a high component of cash and cash equivalents, relative to their market cap. Most of the companies in the list that threw up are public sector units, where the cash might be high but there is an implied governance discount. Even with respect to the commodity companies in the list, one needs to keep in mind that the prevailing low commodity prices can hit profitability and cash flows and hence, the cash that is sitting on the books might actually reduce. Read on to find out more about our favoured five.
Here's what you could buy
A list of stocks which have the highest cash relative to market cap