Solar Stocks With More Bankruptcy Risk Than Energy Conversion
NEW YORK (TheStreet) -- Energy Conversion Devices (ENER) entered chapter 11 bankruptcy on Tuesday, but when it comes to solar stocks the failed U.S. solar company is far from alone in struggling to make ends meet.
In fact, even though TheStreet warned investors that Energy Conversion would be entering bankruptcy it's worth pointing out that it doesn't even top the list of potential bankruptcies in the solar sector based on a popular metric for assessing balance sheet risk.
Energy Conversion scored 1.49 on the Altman Z bankruptcy risk metric based on its last reported quarter.
The Altman Z bankruptcy risk ratio, which was invented by New York University professor Edward Altman in 1968, measures several aspects of a company's financial health -- including working capital, total assets, total liabilities, market capitalization, sales, retained earnings and earnings before interest & taxes (EBIT) -- to forecast the probability of a bankruptcy protection filing within two years. Since its inception, the formula has been 72% accurate in predicting corporate bankruptcies two years prior to the filing, according to Investopedia.Companies with an Altman Z-Score of 3 or higher are considered safe with little danger of bankruptcy, while those with a score of 1.81 or lower are considered distressed and are more likely to go bankrupt. Anything in between is a grey area. Here are U.S. solar stocks that have even lower Altman Z scores than Energy Conversion:
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV