Debt Danger: Stocks Under $10 for a Reason?
Shares of American Airlines parent company AMR were halted seven times Monday, as growing fears the third-largest U.S. airline could be headed for bankruptcy protection sparked a sell-off.
Although AMR told CNBC that it is not currently weighing a pre-packaged bankruptcy protection filing, concerns over its liquidity have sent the stock down 75 percent in 2011.
Eastman Kodak faced the same allegations last Friday, which sent the stock down 50 percent. On Monday, however, the stock was sharply higher after the company said it had no intention of filing for bankruptcy.
Similar to AMR, Eastman Kodak shares are down 75 percent this year.
One of the metrics closely watched by investors is the amount of debt a company accumulates. While debt may be the result of an acquisition or investment, overleveraging could be the kiss of death for certain companies.
Below is a list of S&P 500 companies with heavy debt loads in relation to their total assets and cash levels. These companies trade in the single digits and are down more than 21 percent year-to-date compared to a 13 percent loss for the S&P 500.
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