Story First Appeared on Business Insider -
Following is a list of ten of the U.S. companies which GMI Ratings (a governance research firm) has identified as having a high likelihood of insolvency in the next twelve months.
This list is by no means comprehensive, nor are these the companies at greatest risk. Rather, they present potential solvency issues that have not yet been identified by the marketplace.
Analysis using GMI Ratings’ Bankruptcy Risk Model places the probability of insolvency of the listed companies in a range from 6.5 percent to 23.3 percent, or a one in four chance. Another dozen companies tested with similar results, but were removed from the list because they are late filers and probabilities of bankruptcy could not be determined without more recent data.
The likelihood of insolvency during the next one-year period is a function of a company’s exposure in four areas:
• Macro-economic events (i.e., the state of the overall economy). The U.S. may still be in the throes of recession, with added alarm over the debt crises in Europe, and the pace of recovery is lethargic.
• Micro-economic events (i.e., the state of the industry). The home building industry has suffered greatly in the past four years. Airlines are at the mercy of fluctuating oil prices. Bookstores and paper products are fighting to overcome reduced demand. Other industries may find themselves disproportionately affected.
• Specific product events, such as product failure.
• The company’s ability to finance continuing operations.
All these factors are intertwined, and impact each company in varying degrees.
(All bankruptcy risks were calculated by GMI Ratings.)
----------------------------------------------------------------------------------------------------
#10 Targacept, Inc.
Bankruptcy risk: 6.5%
Market cap ($MM): $140
Founded: 1997
Industry: Biotechnology
Targacept is in Biotechnology, a highly competitive industry dependent on successful product launches. Product failure can be a disaster.
----------------------------------------------------------------------------------------------------
#9 KB Home
Bankruptcy risk: 7.7%
Market cap ($MM): $592
Founded: 1957
Industry: Home-Building
KB Home is in home building. The market is convinced that this industry is turning around. That may be true, but the rate of change may not be sufficient to support the very large debt levels associated with KB Home over the next 12 months.
----------------------------------------------------------------------------------------------------
#8 Pacific Sunwear of California, Inc.
Bankruptcy risk: 7.9%
Market cap ($MM): $112
Founded: 1980
Industry: Retail - Apparel / Accessories
The Retail Apparel industry is constantly faced with winners and losers. It is highly dependent on second-guessing the latest fad. Pacific Sunwear (PacSun) seems to be on the wrong side of the marketplace. New product introduction may save them but that, in itself, is associated with substantial risk.
----------------------------------------------------------------------------------------------------
#7 Central European Distribution Corp
Bankruptcy risk: 7.9%
Market cap ($MM): $228
Founded: 1990
Industry: Beverages - Distillers / Wineries
Central European Distribution Corporation is also in a highly competitive business. The company’s management has proven time and time again that its business decisions are inept. There are many questions surrounding the quality of their accounting.
----------------------------------------------------------------------------------------------------
#6 Coldwater Creek Inc.
Bankruptcy risk: 8.9%
Market cap ($MM): $79
Founded: 1984
Industry: Retail - Apparel / Accessories
Like Pacific Sunwear, Coldwater Creek is an apparel company that seems to be on the wrong side of the marketplace. Introducing new products may save them, but that's still a very risky venture.
----------------------------------------------------------------------------------------------------
#5 Republic Airways Holdings Inc.
Bankruptcy risk: 10.8%
Market cap ($MM): $268
Founded: 1973
Industry: Airlines
Debt-laden airline Republic Airways is very dependent on the price of jet fuel, which tracks the cost of oil. There are accounting questions here as well.
----------------------------------------------------------------------------------------------------
#4 Beazer Homes USA, Inc.
Bankruptcy risk: 11.0%
Market cap ($MM): $263
Founded: 1985
Industry: Home-building
Companies in the home-building industry, like Beazer Homes USA, have been suffering in this economy. Although many people believe that the home-building market is turning around, the rate of change may not be sufficient to support the very large debt levels associated with Beazer over the next 12 months.
----------------------------------------------------------------------------------------------------
#3 Complete Genomics, Inc.
Bankruptcy risk: 13.3%
Market cap ($MM): $64
Founded: 2006
Industry: Biotechnology
Biotechnology is a highly competitive industry dependent on successful product launches. For companies like Complete Genomics, product failure can mean financial disaster.
----------------------------------------------------------------------------------------------------
#2 Globalstar, Inc.
Bankruptcy risk: 15.7%
Market cap ($MM): $106
Founded: 1991
Industry: Wireless Telecommunications Services
Many years ago, Globalstar chose a technology that is no longer mainstream. They become more marginalized as a business with the passage of time.
----------------------------------------------------------------------------------------------------
#1 MEMC Electronic Materials, Inc.
Bankruptcy risk: 23.3%
Market cap ($MM): $388
Founded: 1959
Industry: Semiconductors
MEMC has substantially shifted its focus to the solar power industry and away from semi-conductor subcontracting. The risk of success is extremely high, not only for MEMC but for any company that makes such a dramatic change in its core business.
Showing posts with label oil prices. Show all posts
Showing posts with label oil prices. Show all posts
Friday, March 1, 2013
Tuesday, May 8, 2012
Crude Oil Prices Down - For Now
Story first appeared in The Washington Post.
Crude oil prices slid Monday to the lowest level since February as weak economic data and high prices dampened expectations for consumption just three weeks ahead of the summer driving season.
Oil analysts also said that the outcome of European elections — with candidates critical of government austerity measures winning in France and Greece — had also revived concerns about the stability of the euro zone. A stronger dollar also pushed oil prices down slightly.
The price of the benchmark West Texas Intermediate grade of crude oil fell 55 cents to $97.94 a barrel for June delivery, a drop of 11 percent since the 2012 peak of $109.77 reached Feb. 24.
U.S. gasoline prices have also eased slightly, edging down to $3.78 a gallon, down about 4 cents from a week ago and down 15.5 cents in the past month, according to AAA, though nine states still have prices of $4 a gallon or more.
While still steep, lower gasoline prices could defuse a potentially thorny campaign issue for President Obama. The GOP presidential front-runner has said that there is “no question” that Obama is to blame for high gasoline prices. Obama has blamed global supply and demand.
An oil analyst at Oppenheimer & Co., said the reasons for lower oil prices recently were weak demand caused by slow economy; less fear of potential supply disruption; Obama’s threat to go after financial speculators; Saudi Arabia’s increased production to reduce prices and help economic recovery; and increased U.S. oil production.
Oil analysts warned that crude prices could still firm up if the economic recovery picks up or if there are renewed fears of a supply disruption in the Persian Gulf.
There have been some disappointing economic numbers, and there are concerns over the European elections and the overall euro sovereign-debt issue. But U.S. oil demand is holding up well given the high oil prices and the moderate pace of U.S. economic growth. We expect that U.S. economic growth of around 2 percent will continue to support U.S. oil demand.
Recent financial deals to keep open some aging East Coast refineries have also eased concerns about gasoline prices in that region, and U.S. inventories are plentiful.
Gasoline prices could increase as the peak driving season approaches. This summer looks like it may be slightly weaker than originally thought, but it’s still a tight market, and summer gasoline is hard for refiners to make. The worst isn't over for consumers, and there will probably be another price pickup before the July Fourth weekend.
The reversal of the Seaway oil pipeline, which runs from Oklahoma to refineries along the Gulf Coast, would ease the bottleneck at Cushing, Okla., and raise prices there. The Cushing oil terminal is where the New York Mercantile Exchange prices its benchmark crude.
The global oil supply picture has been less dire than many oil traders expected.
Higher Saudi oil production has offset declines in Iran’s oil exports. These have been impeded by Europe’s decision to impose an embargo on imports from Iran and by the tightening of U.S. financial sanctions worldwide against companies buying oil from Iran.
In addition, Iraqi oil production and exports hit recent highs in April.
Supplies have been disrupted by local fighting in the Sudans, Syria, Yemen and Nigeria. And Iran remains a major wild card. For now, however, geopolitical anxieties have eased.
It seems like the concerns over Iran have receded into the background a little bit. The market has been much more focused on the economy. In both Washington and Iran, the rhetoric has died down a little bit.
Global demand remains uncertain, given the debate over austerity in Europe and signs that China’s breakneck growth may be slowing somewhat.
In addition, now that Japan has closed all of its 54 nuclear power plants in the wake of last year’s tsunami, the Asian economic giant is importing 300,000 to 400,000 barrels of fuel oil a day. Several other countries have been building up inventories, which were drawn down in Europe during the conflict in Libya last year.
For more national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
Crude oil prices slid Monday to the lowest level since February as weak economic data and high prices dampened expectations for consumption just three weeks ahead of the summer driving season.
Oil analysts also said that the outcome of European elections — with candidates critical of government austerity measures winning in France and Greece — had also revived concerns about the stability of the euro zone. A stronger dollar also pushed oil prices down slightly.
The price of the benchmark West Texas Intermediate grade of crude oil fell 55 cents to $97.94 a barrel for June delivery, a drop of 11 percent since the 2012 peak of $109.77 reached Feb. 24.
U.S. gasoline prices have also eased slightly, edging down to $3.78 a gallon, down about 4 cents from a week ago and down 15.5 cents in the past month, according to AAA, though nine states still have prices of $4 a gallon or more.
While still steep, lower gasoline prices could defuse a potentially thorny campaign issue for President Obama. The GOP presidential front-runner has said that there is “no question” that Obama is to blame for high gasoline prices. Obama has blamed global supply and demand.
An oil analyst at Oppenheimer & Co., said the reasons for lower oil prices recently were weak demand caused by slow economy; less fear of potential supply disruption; Obama’s threat to go after financial speculators; Saudi Arabia’s increased production to reduce prices and help economic recovery; and increased U.S. oil production.
Oil analysts warned that crude prices could still firm up if the economic recovery picks up or if there are renewed fears of a supply disruption in the Persian Gulf.
There have been some disappointing economic numbers, and there are concerns over the European elections and the overall euro sovereign-debt issue. But U.S. oil demand is holding up well given the high oil prices and the moderate pace of U.S. economic growth. We expect that U.S. economic growth of around 2 percent will continue to support U.S. oil demand.
Recent financial deals to keep open some aging East Coast refineries have also eased concerns about gasoline prices in that region, and U.S. inventories are plentiful.
Gasoline prices could increase as the peak driving season approaches. This summer looks like it may be slightly weaker than originally thought, but it’s still a tight market, and summer gasoline is hard for refiners to make. The worst isn't over for consumers, and there will probably be another price pickup before the July Fourth weekend.
The reversal of the Seaway oil pipeline, which runs from Oklahoma to refineries along the Gulf Coast, would ease the bottleneck at Cushing, Okla., and raise prices there. The Cushing oil terminal is where the New York Mercantile Exchange prices its benchmark crude.
The global oil supply picture has been less dire than many oil traders expected.
Higher Saudi oil production has offset declines in Iran’s oil exports. These have been impeded by Europe’s decision to impose an embargo on imports from Iran and by the tightening of U.S. financial sanctions worldwide against companies buying oil from Iran.
In addition, Iraqi oil production and exports hit recent highs in April.
Supplies have been disrupted by local fighting in the Sudans, Syria, Yemen and Nigeria. And Iran remains a major wild card. For now, however, geopolitical anxieties have eased.
It seems like the concerns over Iran have receded into the background a little bit. The market has been much more focused on the economy. In both Washington and Iran, the rhetoric has died down a little bit.
Global demand remains uncertain, given the debate over austerity in Europe and signs that China’s breakneck growth may be slowing somewhat.
In addition, now that Japan has closed all of its 54 nuclear power plants in the wake of last year’s tsunami, the Asian economic giant is importing 300,000 to 400,000 barrels of fuel oil a day. Several other countries have been building up inventories, which were drawn down in Europe during the conflict in Libya last year.
For more national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.
Subscribe to:
Posts (Atom)