24/7 Wall St. » FDML

Are CBS (CBS) And Sprint (S) At Risk For Bankruptcy?

247wallst — Fri, 18 Sep 2009 18:34:25 +0000

Audit Integrity, a research firm, has come out with a list of the large American companies which are most likely to go bankrupt in the next year. The data behind the figures seem valid, but some of the companies on the list which include CBS (CBS), Sprint (S), AMD (AMD), and Sirius XM (SIRi) seem improbable candidates.

The corporate communications staffs of these companies and their outside public relation firms will tell their managements to keep quiet and not react. A reaction, they will argue, just makes it look like Audit Integrity knows what it is doing and that there is some validity to their analysis. Audit Integrity is probably counting on that. It will get a lot of exposure for the study and little ,if any, legitimate criticism.

Audit Integrity says its research services support risk management practices that help investors, insurers and others lower risk and improve performance with objective ratings and reports.

The basis by which it determines which companies are in trouble is to look at three methods for examining firms tha may be in trouble. Audit Integrity says“Each of these three approaches – accounting-based, market-based, fraud-based –is moderately effective on a stand-alone basis in predicting bankruptcies. Since the models are not highly correlated, each model has the potential to add incremental value to the other models. Audit Integrity combined the three approaches to determine whether the accuracy ratio of an aggregate model would surpass that of any single approach.”

The list does include some companies that are probably in deep financial trouble including Rite Aid (RAD) and Macy’s (M).

Also listed are American Air (AMR), which just raised $2.9 billion, which the analysis probably does not take into account. Transportation companies Continental Air (CAL) and Hertz (HTZ) are on the list.

Some of the better known public companies that have been targeted by Audit Integrity include advertising giant Interpublic (IPG) and US tire company Goodyear (GT). Not surprisingly, Las Vegas Sands (LVS), a casino firm that has battled for its life for months is included.

The balance of the list is Federal Mogul (FDML), Textron (TXT), Liberty Media Capital (LCAPA), Mylan (MYL), Apartment Investment and Management (AIV), Redwood Trust (RWT), Oshkosh (OSK) and Amkor (AMKR).

Douglas A. McIntyre

Posted in Research Tagged: AIV, AMD, AMKR, AMR, CAL, CBS, FDML, GT, HTZ, IPG, LCAPA, LVS, MYL, OSK, RWT, S, SIRI, TXT

Carl Icahn Weighed Down By Investments (IEP, BIIB, MOT, YHOO, FDML)

247wallst — Tue, 12 Aug 2008 09:47:13 +0000

Icahn Enterprises LP (NYSE: IEP) is perhaps known more for its billionaire owner/founder Carl Icahn more than it is for its staff, team efforts, and even the enterprise’s name. Icahn’s investment vehicle posted a loss for Q2-2008 as investment losses mounted. The company lost $98.8 million versus a profit of $64.2 million year over year from Q2-2007.

So far, Icahn’s investments in Biogen-Idec (NASDAQ: BIIB), Motorola (NYSE: MOT), and Yahoo! (NASDAQ: YHOO) are only partly offset by the recent gains (unrealized) in ImClone Systems (NASDAQ: IMCL). Being an activist investor made Carl Icahn a billionaire. That hasn’t made him immune to making wrong investment activist target picks.

Icahn Enterprises posted a loss at -$1.37 EPS (technically earnings per"unit). There are no earnings estimates on this as results canfluctuate wildly from quarter to quarter depending on equity values andon realized gains and losses. To show evidence of this, the LP showednegative revenue of $149.7 million versus revenue of $783.1 million theprevious year. Icahn has essentially taken majority control ofFederal-Mogul Corp. (NASDAQ: FDML) as of July 3.

Icahn’s units are having a tough year so far long before today camealong. Shares of the units are down over 4% today on thin volume at$64.00, and the 52-week trading range is $51.52 to $136.67. If you arenot a unit-holder and are worried about Mr. Icahn and his fortune(s),don’t worry yourself too much. He can handle it.

Jon C. Ogg
August 12, 2008

Post-Bankruptcy, Federal Mogul Heads For NASDAQ (FEMO, FDML)

247wallst — Thu, 10 Apr 2008 09:28:32 +0000

Federal-Mogul Corporation (OTCBB: FEMO) has recently exited from bankruptcy, and has traded OTC on the Bulletin Board since. Today, the company has announced that it will leave the OTC market and head over to the NASDAQ Global Market on April 23, 2008. Its new proposed stock ticker symbol will be "FDML."

Federal-Mogul also recently announced that it will report its first quarter 2008 results on April 22, 2008.

Since emerging from bankruptcy, this has traded in a range from 418.00 to $27.00, and shares closed yesterday at $19.40. Because of acquisitions made, this company ended up with something to the tune of more than 350,000 asbestos claims. As a reminder, Carl Icahn owns (as of last look) most of the post-bankruptcy company because of his funding that helped pay asbestos claims.

The company manufactures and distributes parts, components, and systems in the automotive, small engine, heavy-duty, marine, railroad, aerospace, and industrial markets.

You can join our open email distribution list to hear about reorganizations, special financings, secondary offerings, IPO’s, M&A, and more previews for other special situations in various stages.

Jon C. Ogg
April 10, 2008

Jon Ogg produces the Special Situation Investing Newsletter. He can be reached at jonogg@247wallst.com and he does not own securities in the companies he covers.