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TheStreet Open House

5 More Companies That Are Distressing Investors

Orbitz Worldwide: (OWW)

TheStreet Ratings Recommendation: HOLD

Altman Z Score: -8.81

Buy OWW Ratings Report

Although Orbitz's share price has increased by nearly 46% in the past year, there are still risks with an investment in this travel provider. Orbitz is facing intense competitive pressures as the company's flagship site-Orbitz.com remains unprofitable -- as other online-travel providers such as Priceline.com and Kayak have thrived even in the face of a struggling economy here and overseas. Here's a snippet from our report:

"The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry.

"Orbitz has very weak liquidity. Currently, the quick ratio is 0.50, which clearly shows a lack of ability to cover short-term cash needs.

"The debt-to-equity ratio is very high at 2.91 and currently higher than the industry average, implying that there is very poor management of debt levels within the company."

Level 3 Communications: (LVLT)

TheStreet Ratings Recommendation: HOLD

Altman Z Score: -3.80

Buy LVLT Ratings Report

Unprofitable and saddled with debt, Level 3 Communications looks like a risky proposition by any means of analysis. As of last check, LVLT held nearly $8 billion in net debt and is still unprofitable. The company reported a net loss of 29 cents per share in the most recent quarter. Here's a snippet from our report:

"Level 3 Communications has weak liquidity. Currently, the quick ratio is 0.86, which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

"The debt-to-equity ratio is very high at 6.93 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.

"Compared to other companies in the Diversified Telecommunication Services industry and the overall market, LVLT's return on equity significantly trails that of both the industry average and the S&P 500."

Sprint: (S)

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