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Saturday, June 02, 2012 4:30:58 AM
These 12 Stocks Could Be in Deep Trouble
the spring of 2008, Corporate America was caught off guard. Many companies carried hefty debt loads, and once the financial crisis hit that summer, a number of stocks plunged precipitously on looming bankruptcy fears. The most vulnerable among them: companies with more debt coming due in the following 12 months than cash on hand.
In an economic slowdown, lenders become much more wary of letting a company simply roll over its debt. That's why shares of companies like Hertz (NYSE: HTZ), Domino's Pizza (NYSE: DPZ) and Ford Motor (NYSE: F) briefly saw their shares fall below $3.
Fast-forward to 2012, and now many companies have wizened up. Debt burdens are now much more manageable, and most chief financial officers (CFOs) make sure debt is tied up in long-term borrowings rather than short-term credit lines. Still, not all have learned the lesson. You can still come across companies that are unprepared for the next economic scare. In the table below, you'll find nearly a dozen companies that have more short-term debt than cash.
the spring of 2008, Corporate America was caught off guard. Many companies carried hefty debt loads, and once the financial crisis hit that summer, a number of stocks plunged precipitously on looming bankruptcy fears. The most vulnerable among them: companies with more debt coming due in the following 12 months than cash on hand.
In an economic slowdown, lenders become much more wary of letting a company simply roll over its debt. That's why shares of companies like Hertz (NYSE: HTZ), Domino's Pizza (NYSE: DPZ) and Ford Motor (NYSE: F) briefly saw their shares fall below $3.
Fast-forward to 2012, and now many companies have wizened up. Debt burdens are now much more manageable, and most chief financial officers (CFOs) make sure debt is tied up in long-term borrowings rather than short-term credit lines. Still, not all have learned the lesson. You can still come across companies that are unprepared for the next economic scare. In the table below, you'll find nearly a dozen companies that have more short-term debt than cash.
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