A Look at 10 Companies With High Debt Characteristics

A Look at 10 Companies With High Debt Characteristics

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On Kapitall.com, members are empowered to explore investing ideas based on fundamental criteria. To get started with an instant list of companies by characteristics, select from the toolbar on the playground:

1. Explore Stocks
2. Trader Radar

Trader Radar lists may be analyzed immediately or saved to the playground for regular analysis. There are 10 lists available. To read past coverage on the first three radar lists, click on link to read more:

High / Low Growth (click on link to read about these stocks)
High / Low Risk
Up / Down Momentum
- High/Low Debt
- High Dividend

Radar List: High Debt

The companies with High Debt generated by the Kapitall List tool have high debt ratios, computed as liabilities/assets. These companies happen to be characterized with an Average Price of Profit of 15 and an average 1-Year Return of 14%. Companies with high debt relative to their assets are leveraged. This does not mean they are bad investment ideas: companies with growing profits generally generate higher return on equity helped by higher debt. Conversely, if revenue is shrinking but debt levels are still high, it could be a problem.

Investors using the high debt list should ask some basic questions:

1. Why is the debt ratio so high?
2. Does the company have healthy sales to pay for interest on debt?
3. If the company does not have growing revenue, why not?
4. Does the company have cash or positive cash flow to service the debt?

Click play to view the return of these companies since 2011 (Kapitall's Compar-o-matic tool displays a maximum of 9 companies):

A word of caution:  auto-generated stock lists are a starting point for investors to create watch lists. Investors may dig deeper, by running a company snapshot and the Number Cruncher. The Number Cruncher provides data on the financials and the SEC filings. These filings provide a past snapshot of company performance, but their easy availability on Kapitall give investors an edge. Few investors read SEC filings, so by reading them, you are well ahead of everyone else.

Business Section: Investing Ideas

The Low Risk Radar List represented 7 of the 17 sectors. The primary driver for stocks over the next few weeks will be quarterly earnings.

The 10 companies on the Kapitall list as of October 19 2012 are sorted by market capitalization. Taken together, they have a diversification score of 55%. Investors should pay attention to the earnings dates for these companies:

List Average 1-Year Return: 10%.

 

1. Nike Inc. (NKE, Earnings, Analysts, Financials): Designs, develops, and markets footwear, apparel, equipment, and accessory products for men, women, and children worldwide. Market cap at $42.57B, most recent closing price at $94.48.

Nike Inc. has liabilities similar to that of NVIDIA: through accrued expenses and accounts payable. This would be expected from a clothing goods company.

 

2. Accenture plc (ACN, Earnings, Analysts, Financials): Operates as a management consulting, technology services, and outsourcing company. Market cap at $46.99B, most recent closing price at $67.83.

 

3. Avago Technologies Limited (AVGO, Earnings, Analysts, Financials): Engages in the design, development, and supply of analog semiconductor devices worldwide. Market cap at $8.18B, most recent closing price at $33.40.

Avago Technologies is also a semiconductor company. Its shares declined in recent months, as investors reduce their exposure in cyclical sectors, in anticipation for a slower economy.

 

4. NVIDIA Corporation (NVDA, Earnings, Analysts, Financials): Provides visual computing, high performance computing, and mobile computing solutions that generate interactive graphics on various devices ranging from tablets and smart phones to notebooks and workstations. Market cap at $7.42B, most recent closing price at $11.97.

NVIDIA is a surprising member of the high debt ratio list. Digging deeper using the Number Crucher, NVIDIA has $1.4 billion in liabilities against $5.9 billion in assets. On its balance sheet, marketable securities increased year-after-year, and is now at $2.46 billion. NVIDIA has no debt, but all of its liabilities are from accounts payable, accrued expenses, and “other” long term liabilities. This is typical of a semiconductor company.

 

5. Dick's Sporting Goods Inc. (DKS, Earnings, Analysts, Financials): Operates as a sporting goods retailer in the United States. Market cap at $6.22B, most recent closing price at $51.24.

 

 

6. Williams-Sonoma Inc. (WSM, Earnings, Analysts, Financials): Operates as a specialty retailer of home products. Market cap at $4.65B, most recent closing price at $47.20.

Williams Sonoma Inc is trading at a 52-week high.

 

7. CLARCOR Inc. (CLC, Earnings, Analysts, Financials): CLARCOR and its subsidiaries provide filtration products, filtration systems and services, and consumer and industrial packaging products worldwide. Market cap at $2.22B, most recent closing price at $44.29.

 

8. Pier 1 Imports, Inc. (PIR, Earnings, Analysts, Financials): Operates as an importer and specialty retailer of imported decorative home furnishings and gifts in the United States, Canada, and Mexico. Market cap at $2.16B, most recent closing price at $20.30.

Pier 1 Imports, Inc. (PIR) are trading at a 52-week high.

 

9. Guess' Inc. (GES, Earnings, Analysts, Financials): Engages in the design, marketing, distribution, and licensing of apparel and accessories for men, women, and children. Market cap at $2.13B, most recent closing price at $24.96.

 

10. Finish Line Inc. (FINL, Earnings, Analysts, Financials): Operates as a mall-based specialty retailer in the United States. Market cap at $1.06B, most recent closing price at $20.92.

 

 

 

 

Written by Chris LauTo interact and discuss these picks with users, attach your watch list or portfolio to your friends on Kapitall. Message the author. He is ranked sixth (by points) on the all-time leaderboard. The leaderboard is located on your score icon -> Leaderboard.  Members on Kapitall earn free points, and even more points with every Kapitall Generation trade. These points may be redeemed for goods at the Kapitall store. 

 

 

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One Response to “A Look at 10 Companies With High Debt Characteristics”

  1. romena says:

    Read this qwickly … intel my god ! http://www.informationweek.com/hardware/processor

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