Highlighted stocks include Lufkin Industries, Inc. (LUFK), Parlux Fragrances, Inc. (PARL), and Strayer Education Inc. (STRA).

The stories are all too familiar. General Growth Properties (GGP), the second largest mall operator in America and in business since 1954, has hired bankruptcy counsel as it struggles to refinance $1 billion of debt by the end of the month.

Amylin Pharmaceuticals (AMLN), the San Diego-based biotechnology company, recently announced it would layoff 25% of its workforce in a corporate restructuring with the goal of becoming cash flow positive by the end of 2010.

As credit remains in the deep freeze, why even bother investing in companies that have to go begging for money?

Surprisingly, there are quite a few companies that have cash, are nearly debt free and that are a Zacks #1 Rank (strong buy) or #2 Rank (buy) stocks. These companies can be totally focused on growing their businesses and building wealth for shareholders. They're also deploying some of their extra cash towards dividends and share buybacks.

3 Stocks With Plenty of Cash

Lufkin Industries, Inc. (LUFK) has been designing and manufacturing oil field equipment and power transmission products around the world since 1902 so it's seen a few economic cycles along the way. The company, a Zacks #2 Rank (buy), had $110 million in cash as of Sep 30, 2008 and no debt. It's sharing the wealth by paying a dividend with a current yield of 2.30%.

Parlux Fragrances, Inc. (PARL) manufactures designer fragrances under the names of Paris Hilton and Jessica Simpson. The company, a Zacks #2 Rank (buy), had $24 million in cash on hand as of Sep 30, 2008 and no bank borrowings. It recently announced it was buying back 1 million shares, or 5%, of its publicly traded shares.

Strayer Education Inc. (STRA) engages in higher education services through Strayer University and other holdings. Strayer, a Zacks #1 Rank (strong buy) stock, had $117.1 million in cash, cash equivalents and marketable securities as of Sep 30, 2008 and no debt.

The company recently announced that it was increasing its annual dividend to $2.00 from $1.50 per share. It also intends to repurchase up to $100 million in stock over the next 14 months.

Billions in Cash

It's not only smaller companies that have lots of cash. The Big Three auto makers are seeking $25 billion to keep operating, but there are other big cap companies that have nearly that much cash on hand including Apple (AAPL), with $24 billion in cash and equivalents as of Sep 27, 2008, Microsoft (MSFT), with $20 billion in cash and equivalents as of Sep 30, 2008, and ExxonMobil (XOM) with $36 billion in cash and cash equivalents as of Sep 30, 2008.

These companies are seeing falling estimates and are Zacks Rank #3 to #5, but you can keep track of when estimates might turn around by signing up for the Zacks.com Portfolio Tracker which will send you changes in estimates and changes in recommendations.

Invest in Companies with Cash and Little Debt

With tight worldwide credit conditions, companies with cash and little debt will have extraordinary advantages over competitors. Combining these criteria with a high Zacks rank can be a winning investment strategy.