The CAPS Screen: 9 Untouchables
By Ilan Moscovitz
May 12, 2008
Warren Buffett once warned that the most common downfalls of smart people are leverage and alcohol. The current state of the credit market reflects this wisdom, and Fools interested in building a secure and profitable portfolio would do well to heed his advice.
With that in mind, I used our new CAPS screening tool to find out which prominent companies may have bitten off more than they can chew. Below are 10 companies with debt-equity ratios over 2.5.
They also have:
- Market caps greater than $200 million.
- One-star ratings from our CAPS community.
Remember, in the first year for which we have data, one-star companies flamed out with an average loss of nearly 17%.
|
Company
|
Share Price
|
Sector
|
Market Cap
|
|
AMR (NYSE: AMR)
|
$8.19
|
Services
|
$2.0 billion
|
|
Continental Airlines (NYSE: CAL)
|
$17.38
|
Services
|
$1.7 billion
|
|
DexCom
|
$6.40
|
Health care
|
$189 million
|
|
H&R Block (NYSE: HRB)
|
$23.57
|
Services
|
$7.7 billion
|
|
Lamar Advertising (Nasdaq: LAMR)
|
$38.74
|
Services
|
$3.6 billion
|
|
Overstock (Nasdaq: OSTK)
|
$19.34
|
Services
|
$451 million
|
|
RCN
|
$11.87
|
Technology
|
$447 million
|
|
UAL (Nasdaq: UAUA)
|
$13.71
|
Services
|
$1.6 billion
|
|
US Airways Group (NYSE: LCC)
|
$7.08
|
Services
|
$652 million
|
Data from Motley Fool CAPS and Yahoo! Finance as of May 6.
Are these companies in danger? Or simply misunderstood? Come and join us on Motley Fool CAPS to let us know what you think. Our 100,000-strong (and counting) CAPS community wants to hear your opinion.
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