A couple of weeks ago, we took a look at how stocks could be much cheaper - or much more expensive - then they look based on their enterprise value.
Then last week, we used that to identify 16 stocks that are actually selling for far less than their market cap.
Today, we look at the other side of the coin: 19 stocks that are way, way, WAY more expensive than their market cap price tag!The Parameters This Time
Looking at stocks far more expensive by enterprise value is quite a bit different than looking at stocks that are cheaper.
A lot of management teams out there sure do like debt!
In investigating for this article, I found:
- 211 stocks with an enterprise value more than double their market cap.
- 86 stocks with an EV more than triple the market cap!
- 55 with EV more than 4x!
- 40 over 5x!!
- 30 stocks trading over 6x their market price!!!
It took me all the way until 7x over market cap before whittling the list down to something manageable enough to throw into an article. That's pretty amazing.
So for the list below, the we have the only (profitable) stocks in the market that have 1) over a 50 million market cap and 2) an enterprise value at least 7x the market cap.What To Do With These?
For gosh sakes, don't buy! That would be thing #1!
After that, a few uses come to mind. For one, all of these companies are profitable, so it is quite possible they may show up in a typical P/E or P/S screen. Consider this a warning to maybe throw them out right away.
Also, there are some investors (I'm not one) who are looking for shorting opportunities. This could be an interesting list for some candidates. All of these companies have SERIOUS debt problems, which not at all infrequently leads to bankruptcy court.The List
And here are the lucky 19... Stats are from Yahoo!, and were compiled late last week.
|Ticker||Company||MarketCap||EnterpriseValue||% of MktCap|
|BONT||Bon-Ton Stores Inc||75.4||1,030||1,366%|
|BTU||Peabody Energy Corporation||472.9||6,210||1,313%|
|CMLS||Cumulus Media Inc||268.8||2,750||1,023%|
|EXXI||Energy XXI Ltd||146.4||4,170||2,848%|
|HOV||Hovnanian Enterprises Inc||253.3||2,290||904%|
|IGLD||Internet Gold-Golden Lines Ltd||141.5||3,250||2,297%|
|LINE||Linn Energy LLC||902.2||11,240||1,246%|
|NADL||North Atlantic Drilling Ltd||156.8||2,780||1,773%|
|ORIG||Ocean Rig UDW Inc||497.2||4,450||895%|
|RJET||Republic Airways Holdings Inc||183.2||2,250||1,228%|
|ROIA||Radio One Inc||122.1||1,090||893%|
|TC||Thompson Creek Metals Company Inc||104.0||792.7||762%|
|VTG||Vantage Drilling Company||51.6||2,620||5,078%|
|WIN||Windstream Holdings Inc||695.9||11,480||1,650%|
|WTW||Weight Watchers International Inc||334.7||2,440||729%|
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