Worst-Run Companies Deserved Their Spots

My second response to that rebuttal is more theoretical. I use the Z-score as part of my investment analysis. The Z-score, devised by Prof. Edward Altman, a former professor of mine at NYU's Stern School of Business, is a predictive measure of bankruptcy. According to Altman's research, a company with a Z-score of less than 1.81 is classified as bankrupt. (A Z-score calculator is available on my website, TheFinanceProfessor.com.) For the June/July quarter, the Z-scores for these three companies were:

AMD: -1.45

Jamba Juice: -0.46

Sirius: -15.39

These three companies, therefore, were my additions to my worst-run list for 2009. Many other currently poorly managed companies are on that list, carried over from past years. And when a company exhibits significant improvement or otherwise warrants removal from the list, I note that in the next year's column.

Finally, if any of the management in any of the companies mentioned in the article would like to state their case to me directly, I would be happy to accommodate them with an open exchange of opinion and ideas.

-- Written by Scott Rothbort in Millburn, N.J.

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