We recently compiled a list of the 10 Cash-Rich Mid Cap Stocks To Buy Now. In this article, we are going to take a look at where Bunge Global SA (NYSE:BG) stands against the other cash-rich mid cap stocks.
Cash flow is the money moving in and out of a business over a set period. It is important because it shows how much cash a company actually has on hand, rather than just looking at profits on paper. There are different types of cash flow, like cash from operating activities, which comes from a company’s main business, and free cash flow, which is the money left after covering expenses and investments. Businesses keep a close eye on their cash flow to make sure they have enough money to pay bills, invest in growth, and avoid financial trouble. Unlike profits, which can be affected by accounting rules, cash flow reflects real money coming in and going out, making it a key measure of financial health.
Warren Buffett once said that the key to investing is cash flow. How much money a business brings in and how much it pays out over time is crucial. However, despite this basic principle, many companies do not focus enough on cash flow and how efficiently they use their money.
In October 2022, market experts on CNBC’s Halftime Report emphasized the crucial role of free cash flow for businesses. They pointed out that while companies can occasionally rely on external funding from capital markets, they ultimately depend on free cash flow to sustain themselves, since these external financial boosts are not a long-term solution. As the market fluctuates between favoring growth and value stocks, investors tend to gravitate toward familiar territory, which is prioritizing companies with strong free cash flow.
Similarly, in late September 2023, Elizabeth Evans, managing partner at Evans May, told CNBC that for the first time in decades, cash holdings are generating returns. She explained that having substantial cash reserves signals strong future purchasing power, which is an encouraging sign for equity investors looking to invest for the long term. In this article, we will take a look at some cash-rich stocks to buy.
Our Methodology
For this article, we used the Finviz stock screener to identify cash-rich mid-cap stocks. We applied a filter to select companies with market caps between $2 billion and $10 billion. Additionally, we used a current ratio (CR) filter of over 2 to identify stocks with strong current assets. CR is a company’s current assets divided by its current liabilities. If the CR is over 1, it means the company has more assets than liabilities, usually because of high cash reserves, receivables, or inventory. After filtering, we manually searched for companies with cash and cash equivalents exceeding $1 billion as of December 31, 2024 and selected the 10 stocks with the highest cash reserves. The list below is ranked in ascending order based on cash and cash equivalents. We have also included hedge fund sentiment as of Insider Monkey’s database of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Aerial view of an orchard of different fruits, representing the abundance of the agribusiness.
Bunge Global SA (NYSE:BG)
Number of Hedge Fund Holders: 38
Cash and Cash Equivalents as of December 31, 2024: $3,795,000,000
Bunge Global SA (NYSE:BG), an American multinational agribusiness and food company, ranks 2nd on our list of the best cash rich stocks. On January 15, 2025, Canada gave conditional approval to Bunge’s $34 billion merger with Viterra, clearing one of the last major hurdles for the massive agriculture deal. To move forward, Bunge is required to sell six grain elevators in Western Canada and commit to investing at least C$520 million in the country over the next five years. This merger creates a global agricultural giant, boosting Bunge Global SA (NYSE:BG)’s biofuels market position but reducing competition for farmers.
The company generated $1.7 billion in adjusted funds from operations in 2024. After spending $451 million on maintenance and safety, the company had $1.2 billion left in discretionary cash flow. Bunge Global SA (NYSE:BG) used this money to distribute $378 million in dividends, invest $925 million in growth projects, and buy back $1.1 billion in shares, $500 million of which came from selling its Sugar JV. This led to a $444 million reduction in retained cash flow. The company expects an adjusted EPS of about $7.75 for 2025, not factoring in pending acquisitions.
Among the hedge funds tracked by Insider Monkey, 38 funds were bullish on Bunge Global SA (NYSE:BG) during Q4 2024, compared to 33 funds in the last quarter.
Overall BG ranks 2nd on our list of the best cash-rich mid cap stocks to buy. While we acknowledge the potential of BG as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
