A client asked me to generate a list of stocks trading at "less than cash" this morning. As I went about this process and identifed almost 1000, I quickly realized how many companies have been wiped out. Many of the names were already in bankruptcy, but many seem to be headed there. I noticed how many stocks are trading below $1 in my system (StockVal), and it blew me away. I then created a list of 290 names that trade below $1 and are down over 90% in the past year. While I won't publish all of the names, I will say that they are from all sectors of the economy. Suffice it to say, most of these companies are carrying large debt-loads.
By sector, here are some of the names you might know as a consumer or an investor:
- Energy: Uranium Resources (URRE), Pacific Ethanol (PEIX), Superior Offshore (DEEPQ)
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Materials: Chematura (CEM), Boise (BZ), Smurfit-Stone (SSCC) (I called that one)
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Industrials: Avis (CAR), Medis Technologies (MDTL), Building Materials Holding (BLGM)
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Consumer Discretionary: Sirius (SIRI), Pier 1 (PIR), Borders (BGP), Casual Male (CMRG), Select Comfort (SCSS), Trump Entertainment Resorts (TRMP), Westwood One (WWON)
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Consumer Staples: Rite Aid (RAD), Pilgrims Pride (PGPDQ), Jones Soda (JSDA)
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Healthcare: KV Pharma (KVA), Jazz Pharma (JAZZ) and a plethora of underfunded biotechs
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Financials: Fannie Mae (FNM), Freddie Mac (FRE), General Growth (GGP)
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Tech: Axcelis (ACLS), Nextwave Wireless (WAVE), Kemet (KEME), Navisite (NAVI), Spansion (SPSN), Planar Systems (PLNR)
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Telecomm: Virgin Mobile (VM), Globalstar (GSAT)
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Utilities: 3, but I have never heard of any of them so won't bother...
As the economy withers, it serves investors well to understand what happened to these stocks. For the most part, these firms had too much debt to weather the storm. One of my central themes this year is that there are a lot more companies out there like these than investors realize.
Disclosure: No positions in any stock mentioned
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