This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Companies Least Likely to Go Bankrupt

NEW YORK (TheStreet) -- The financial crisis stoked investor fears that bankruptcy was imminent for a number of companies, no matter how big or small. Luckily for investors, there is a way to examine certain financial metrics to see which companies are least likely to declare bankruptcy.

The Altman Z-score, a formula developed by New York University professor Edward Altman in 1968, measures several aspects of a company's financial health to forecast the probability of that company entering bankruptcy within two years. The formula was found to be approximately 80% to 90% accurate in predicting bankruptcy on samples of distressed firms one year prior to the event by examining working capital, retained earnings and other financial inputs, according to Altman's study.

Companies with an Altman Z-score of at least 3 are considered in the "safe" zone, while companies with a score of 1.2 or below are considered "distressed."

TheStreet ranks companies trading on the New York Stock Exchange, Nasdaq, or American Stock Exchange that have a minimum $10 million market cap with the highest Altman z-score and examines what the future holds for these investors.


10. Nordic American Tanker Shipping (NAT) is an oil tanker transportation company whose shares climbed a 52-week higher in January before falling days later after the company announced a secondary offering. Shares fell to a 52-week low shortly after Nordic American Tanker announced a first-quarter dividend to 60 cents per share, up from 25 cents in the fourth quarter of 2009.

Altman Z-score: 61.04

Closing Price: $29.61 (June 21)

One-Year Total Return: -0.4%

Consensus: Fifteen analysts cover Nordic American Tanker shares; six recommend buying the stock and six suggest holding shares. Another three firms, including EVA Dimensions, say that investors should sell shares. On Monday, Jefferies issued a buy rating on the stock with a $39 price target, while Cantor Fitzgerald offered a hold rating and $28 price target on the company's stock.

Valuation: Nordic American Tanker shares are expensive on a price-to-earnings and price-to-sales ratio of 23.17 and 11.21, respectively. That compares to its peers' average P/E ratio of 16.23 and average P/S ratio of 2.27.

1 of 10

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs