Seven Stocks Worth Avoiding

There are several stocks in the S&P 500 that may be worth avoiding due to the fact that they are generating negative earnings, have negative operating cash flow, and a high debt to capital ratio.

Advanced Micro Devices, Inc. (AMD) Negative earnings of $5.10 per share. Negative operating cash flow. Debt to Capital Ratio: 98%

SLM Corporation (SLM) Negative earnings of $0.69 per share. Operating cash flow of negative $5.7 billion. Debt to Capital Ratio: 97%

MBIA Inc. (MBI) Negative earnings of $12.29 per share. Negative operating cash flow. Debt to Capital Ratio: 94%

Verisign, Inc. (VRSN) Negative earnings of $1.87 per share. Negative profit margin. Debt to Capital Ratio: 93%

Frontier Communications Corp (FTR) $4.7 billion in debt, only $173 million in cash. Quarterly earnings drop of 41.9%.
Debt to Capital Ratio: 90%

CB Richard Ellis Group, Inc. (CBG) Negative earnings of $4.81 per share. Negative operating cash flow. Debt to Capital Ratio: 89%

CIT Group Inc. (CIT) Negative earnings of $11.06 per share. Negative profit margin of 169%. Debt to Capital Ratio: 89%

If you want to see some stocks at the other end of the spectrum, check out the downloadable Excel databases of Below Book High Yield Stocks, Debt Free Stocks Selling At Or Near Cash, and No Debt Low Price To Cash Flow Stocks here.

Comments

[ECONOMICS 101:]

There should be 777 stocks to avoid, not just 7. I don't understand all the bullishness lately. Nothing has changed and it's only getting worse out there..

Apr 06 02:07 PM

[a. palmer jr.:]

I'm avoiding them all, at least for a while. The market's too scary for me. It seems every time I purchase a stock it heads straight for the bottom, even if I've done some research on it.

Apr 06 06:52 PM

[amdman:]

In the past month AMD has almost doubled from its low of $2, and AMD forecasts that they will be profitable this year on new product ramp.
AMD has run up twice before from $3 to $40 and back, high beta stock. Maybe this guy will like AMD at $40 when I sell. ;)

Apr 06 10:11 PM

[EdG:]

Anyone who has ever needed SSL verification will realise that Verisign (VRSN) is the market leader charging up to double what the competitors charge.

That Verisign (VRSN) is is a bad investment can be shown by total sales of $1B debt of $2.5B and a (share market cap) of $4B. Sales did increase of 13% in 2008 but it will take a faster increase than this to generate profit any time soon.

Apr 07 08:06 AM

[principle:]

I don't think the numbers are even accurate, either non-adjusted or whatever its showing more negative than reality to make a point.

Apr 08 08:34 PM

[stockpicker:]

CBG stock price rose 300% in the month after this article was published... good call.

May 05 11:04 AM