Momentum Ideas: 17 Cash-Rich Companies Hitting New Highs

If you're a momentum investor looking for potentially undervalued names, the following list might offer an interesting starting point for your own analysis.

All the companies mentioned below have hit new 52-week highs in recent sessions. Interestingly, these companies also have high trailing twelve month levered free cash flows (expressed as a percentage of market cap).

Levered free cash flow is the free cash flow available to the company after paying interest on outstanding debt. It is the cash flow available for operating expenses, which is what drives future returns.

Consider their cash holdings, do you consider these companies undervalued? Full details below.

Levered FCF sourced from Yahoo Finance, all other data sourced from Finviz.

click for expanded image

List sorted by levered FCF as a percentage of market cap.

1. AmSurg Corp. (AMSG): Hospitals Industry. Market cap of $742.01M. Levered FCF is 18.53% of market cap (TTM levered FCF at $137.52M). The stock is a short squeeze candidate, with a short float at 6.3% (equivalent to 13.33 days of average volume). The stock has had a good month, gaining 11.69%.

2. Photronics Inc. (PLAB): Semiconductor Industry. Market cap of $530.72M. Levered FCF is 15.08% of market cap (TTM levered FCF at $80.04M). This is a risky stock that is significantly more volatile than the overall market (beta = 3.17). It is exhibiting strong upside momentum--currently trading 18.73% above its SMA20, 41.1% above its SMA50, and 74.64% above its SMA200.

3. Deluxe Corp. (DLX): Business Services Industry. Market cap of $1.36B. Levered FCF is 13.46% of market cap (TTM levered FCF at $182.96M). This stock is significantly more volatile than the overall market (beta = 2.05). It is also a short squeeze candidate, with a short float at 5.27% (equivalent to 6.11 days of average volume), and the stock has gained 6.83% over the last week.

4. KBR, Inc. (KBR): Technical Services Industry. Market cap of $5.37B. Levered FCF is 9.89% of market cap (TTM levered FCF at $530.75M). It is exhibiting strong upside momentum--currently trading 6.72% above its SMA20, 11.88% above its SMA50, and 37.55% above its SMA200. The stock has also gained 11.43% over the last week.

5. ConocoPhillips (COP): Major Integrated Oil & Gas Industry. Market cap of $113.73B. Levered FCF is 9.29% of market cap (TTM levered FCF at $10.57B). The stock has had a good month, gaining 11.92%.

6. Teradyne Inc. (TER): Semiconductor Equipment & Materials Industry. Market cap of $3.46B. Levered FCF is 8.12% of market cap (TTM levered FCF at $280.97M). Might be undervalued at current levels, with a PEG ratio at 0.72, and P/FCF ratio at 7.05. The stock has had a couple of great days, gaining 5.01% over the last week.

7. Hercules Offshore, Inc. (HERO): Oil & Gas Drilling & Exploration Industry. Market cap of $671.46M. Levered FCF is 7.83% of market cap (TTM levered FCF at $52.60M). The stock has also gained 38.3% over the last week.

8. Dresser-Rand Group Inc. (DRC): Diversified Machinery Industry. Market cap of $4.06B. Levered FCF is 7.39% of market cap (TTM levered FCF at $299.84M). The stock has had a couple of great days, gaining 9.28% over the last week.

9. Brady Corp. (BRC): Technical Services Industry. Market cap of $1.90B. Levered FCF is 6.17% of market cap (TTM levered FCF at $117.07M). The stock has gained 26.67% over the last year.

10. PSS World Medical Inc. (PSSI): Medical Equipment Wholesale Industry. Market cap of $1.44B. Levered FCF is 6.02% of market cap (TTM levered FCF at $86.85M). The stock has a relatively low correlation to the market (beta = 0.7), which may be appealing to risk-averse investors. The stock is also a short squeeze candidate, with a short float at 12.32% (equivalent to 12.71 days of average volume).

11. Genesco Inc. (GCO): Apparel Stores Industry. Market cap of $965.11M. Levered FCF is 5.77% of market cap (TTM levered FCF at $55.65M). Short float at 12.72% (equivalent to 9.65 days of average volume) indicates the stock is a short squeeze candidate. The stock has gained 47.99% over the last year.

12. Hershey Co. (HSY): Confectioners Industry. Market cap of $12.05B. Levered FCF is 5.76% of market cap (TTM levered FCF at $694.01M). It has a relatively low correlation to the market (beta = 0.3), which may be appealing to risk-averse investors. Also, the stock has had a good month, gaining 13.26%.

13. MAXIMUS, Inc. (MMS): Business Services Industry. Market cap of $1.30B. Levered FCF is 5.48% of market cap (TTM levered FCF at $71.02M). Risk-averse investors may appreciate that the stock has a relatively low correlation to the market (beta = 0.73). The stock has had a good month, gaining 10.68%.

14. The Cooper Companies Inc. (COO): Medical Instruments & Supplies Industry. Market cap of $2.96B. Levered FCF is 5.31% of market cap (TTM levered FCF at $156.99M). The stock is a short squeeze candidate, with a short float at 8.89% (equivalent to 8.04 days of average volume).

15. Marathon Oil Corporation (MRO): Oil & Gas Refining & Marketing Industry. Market cap of $37.38B. Levered FCF is 5.24% of market cap (TTM levered FCF at $1.96B). The stock has been exhibiting strong upside momentum--currently trading 7.69% above its SMA20, 19.66% above its SMA50, and 47.05% above its SMA200. The stock has gained 9.41% over the last week.

16. Novellus Systems, Inc. (NVLS): Semiconductor Equipment & Materials Industry. Market cap of $3.76B. Levered FCF is 5.11% of market cap (TTM levered FCF at $192.10M). It has been seeing strong upside momentum--currently trading 5.13% above its SMA20, 14.72% above its SMA50, and 40.91% above its SMA200. The stock has had a couple of great days, gaining 7.39% over the last week.

17. Assisted Living Concepts Inc. (ALC): Long-Term Care Facilities Industry. Market cap of $430.40M. Levered FCF is 5.09% of market cap (TTM levered FCF at $21.91M). The stock has gained 11.9% over the last week.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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