Data storage stock NetApp (NTAP) is first up on our list. The firm has more than $4 billion in net cash sitting on its balance sheet right now, enough to pay for a whopping 30% of its current market capitalization. When almost a third of each dollar you invest is covered by cash in the bank, that's a pretty substantial reduction of risk. More important, it's a reduction in valuation. Adjusting for cash, NTAP sports a P/E ratio of just 13 right now.
NetApp is positioned on the right side of some substantial trends in 2014. The firm's bread and butter is data storage, a space that's been growing at a breakneck pace as greater demands for cloud services expand storage and back-up requirements. Because NetApp's network-attached storage devices can be purchased ad-hoc (rather than as part as a major datacenter overhaul), it's an ideal vendor for firms whose storage needs are gradually increasing (and those who don't want to shell out massive capital for all-new IT infrastructure).
With net margins that consistently sit in the double-digits, NTAP's cash generation capabilities aren't going anywhere soon. The firm generated more than $274 million in free cash last quarter alone. And as the firm aggressively buys back shares at arguably cheap prices, shareholders should benefit from the concentration of their positions in 2014.
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