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Icahn's Take on Apple Shows What a Difference a Cash Pile Makes

Carl Icahn on Twitter Aug. 13:

"We currently have a large position in Apple. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."

Apple famously has $146B of cash on its balance sheet, and Icahn wants Chief Executive Officer Cook to put that cash to work by buying back more stock -- now! Apple's cash stash equates to $160 per share (nearly one third of the stock price). Which explains why Icahn describes Apple as "extremely undervalued." Excluding cash, Apple trades at just 7.9x earnings.

Now that Icahn has let the cat out of the bag, the question is: what else looks cheap?

The S&P 400 and S&P 500 include just 28 companies that have cash that exceeds 20 percent of their market capitalization. Taking only those companies growing earnings this year (unlike Apple, where they have shrunk 12 percent) there are just 16 companies that make the cut -- we highlighted 10 of these on-air:

Here are the other six we didn't have time to share: General Motors Co. (GM), Health Net Inc. (HNT), Humana Inc. (HUM), Jetblue Airways Corp. (JBLU), MDC Holdings Inc. (MDC) and Wellpoint Inc. (WLP).

I'd also like to share with blog readers some companies which made our first cut but not the second, i.e. they're cheap, but earnings are falling -- like Apple. And included here is their current price-to-equity ratio excluding cash: InterDigital Inc. (IDCC) 3.0x, New York Times Co. (NYT) 4.5x, Computer Sciences Corp. (CSC) 5.4x, Dell Inc. (DELL) 7.1x, Intel Corp. (INTC) 9.4x.

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