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
TheStreet Open House

4 Companies That Are Bleeding Cash

Stock quotes in this article: ACHN, SHLD, RAD, KIOR

NEW YORK ( Stockpickr) -- When it comes to corporate America, it's "survival of the fittest." Sure enough, a handful of companies get culled from the herd every year, finding their way into bankruptcy court after a brutal run of losses. For investors looking for stocks to short, it always pays to focus on these stocks. If their balance sheets keep getting weaker and weaker in the face of open-ended losses, investors tire of pouring fresh funds into them and eventually the well runs dry.

Here's a closer look at four companies that are expected to lose gobs of money in 2012. Though they may not be in deep distress in the next quarter or two, the long-term outlook will weaken further as cash balances drop.

>>5 Big Stocks to Trade for January Gains Achillion Pharmaceuticals

It's easy to take aim at biotech stocks as they are so vulnerable when it comes to cash. Take Achillion Pharmaceuticals (ACHN) as an example. The company's ACH-1625 protease inhibitor drug holds great promise for the treatment of infectious diseases. The drug has a long way to go until it hits the market -- perhaps in 2014 or perhaps never if FDA approval is not granted.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Meanwhile, the company likely finished the year with $70 million in cash and is burning around $15 million per quarter. That means the cash will run out in the summer of 2013, unless the company can find more access to cash. This an obvious risk with many biotechs, but you'd be surprised how many companies wait too long to replenish their balance sheets and see their stocks plunge to distressed levels.

Achillion is E+ sell by TheStreet Ratings.

1 of 4

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 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

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