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The Next Round of Companies That Could Go Bankrupt

". . . GovernanceMetrics International names over 100 companies with an elevated financial distress . . ."

Via Business Insider: Everyone has been warning this week about imminent bankruptcy for American Airlines and Eastman Kodak.

And they are not the only companies on the verge of financial collapse.

The latest watch list from GovernanceMetrics International names over 100 companies with an elevated financial distress probability and which have experienced high-risk events that increase the likelihood of bankruptcy, reports Business Insider.

Many of the companies on the list are largely unfamiliar to the American  public. However, it is not the name of the company that matters; it is the increasing trend towards bankruptcy (being experienced by familiar and unfamiliar companies alike) that should worry people.

Venoco, Inc. (Oil and Gas Exploration)

Financial distress probability: 3.04 percent

Accounting and governance risk: Aggressive

Market Cap.*: $659,790,000

Venoco shares got a boost at the end of August when CEO Timothy Marquez offered to buy out the company. Days later, however, an investor sued to block the buyout, claiming “Marquez strategically timed the proposed transaction during a period of economic turmoil in which the terms of the proposed transaction could be superficially viewed in a positive light”.

SunPower Corporation (Solar Energy)

Financial distress probability: 3.20 percent

Accounting and governance risk: Aggressive

Market Cap.: $652,210,000

It is not as bad as Solyndra, but SunPower has been getting destroyed with

the rest of the U.S. industry. SunPower sold its 250MW California Valley Solar Ranch to NRG Energy this year. It also just signed a new $275 million revolving credit facility as well as a new $200 million letter of credit facility, according to Reuters.

The Shaw Group Inc. (Engineering, Construction, Technology)

Financial distress probability: 3.81 percent

Accounting and governance risk: Aggressive

Market Cap.: $1,723,000,000

The energy and construction conglomerate is trading at its 52-week low. Shaw is selling its 20 percent stake in Westinghouse to Toshiba Corporation, which has been seen as a move away from nuclear.

CoreLogic, Inc. (Financial, Property and Consumer information)

Financial distress probability: 4.44 percent

Accounting and governance risk: Very Aggressive

Market Cap.: $1,287,590,000

CoreLogic has put itself up for sale.  At least seven different firms have expressed interest in acquiring the data firm, according to Reuters. It has hired Greenhill to help with the sale as a whole, or as pieces.

DineEquity, Inc. (Restaurant/Hospitality)

Financial distress probability: 5.97 percent

Accounting and governance risk: Aggressive

Market Cap.: $774,990,000

DineEquity owns Applebee's and IHOP. U.S. chain restaurants have suffered during the recession; many going bankrupt including Friendly's, Fuddruckers, Sbarro, Perkins & Marie Callender, Charlie Brown's Steakhouse and Real Mex.

If this trend continues, especially in the case of IHOP, college students nationwide will be forced to find other means of late-night binge eating.

Quad/Graphics, Inc. (Print/Graphics)

Financial distress probability: 6.25 percent

Accounting and governance risk: Aggressive

Market Cap.: $996,400,000

Quad/Graphics has been on a buying spree, picking up competitor World Color Press out of bankruptcy and buying HGI Company in 2010. Since then profit margins have been under pressure and debt is high, according to The Street.

Barnes & Noble, Inc. (Retail)

Financial distress probability: 6.32 percent

Accounting and governance risk: Aggressive

Market Cap.: $716,220,000

4-week price drop: -25.13 percent

Borders went bankrupt earlier this year. Barnes & Noble's business model is only slightly more viable. It faces new pressure from Amazon after last week's announcement of the new Kindle Fire and cheaper Kindles.

Community Health Systems (Healthcare)

Financial distress probability: 6.88 percent

Accounting and governance risk: Very Aggressive

Market Cap.: $1,752,400,000

Poorer patients and lower Medicare reimbursements have hurt the hospital sector. Community Health Systems has suffered particularly on deteriorating net income and poor profit margins, according to The Street. The company recently sold two of its hospitals in Oklahoma.

Dynegy Inc. ("ancillary services to . . . energy companies")

Financial distress probability: 10.61 percent

Accounting and governance risk: Aggressive

Market Cap.: $680,740,000

Bondholders who believed they were shortchanged by Dynegy’s restructuring recently sued the company. The restructuring was done to try and "help Dynegy avoid bankruptcy."

Standard Pacific Corp. (Construction)

Financial distress probability: 13.35 percent

Accounting and governance risk: Very Aggressive

Market Cap.: $493,090,000

Standard Pacific CEO Ken Campbell will step down next year after attempting an aggressive turnaround. The California luxury home builder bought large amounts of land in 2009 and made a number of layoffs and cost cuts. It has been losing money since 2010, as the housing market double dips.

Clearwire Corporation (Wireless Communications)

Financial distress probability: 14.93 percent

Accounting and governance risk: Aggressive

Market Cap.: $2,240,700,000

Clearwire's WiMax 4G network— used by Sprint—is getting edged out by Verizon and AT&T's LTE 4G networks. The company will be in even more toruble if the AT&T/T-Mobile deal goes through. Furthermore, Clearwire shares declined since the reports of Sprint’s money-losing deal on the iPhone came out, which makes Sprint less likely to by its struggling part.

*Market Cap. is short for "market capitalization." It is the size of a business equal to its current share price multiplied by shares outstanding.

(H/T Business Insider)

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