Beware of Drowning in Standard Pacific

Editor's note: "Bricks and Mortar" is a mock portfolio created by reporter Nicholas Yulico that is meant to help generate real estate and gaming-related stock ideas. In keeping with TSC's editorial policy, Yulico doesn't own or short individual stocks.

With the housing market still crumbling, there is a decent chance that some homebuilders are going to go bankrupt over the next year.

That means if you're eyeing homebuilder stocks, you have to be looking at the companies' debt loads and the cash flows. And in these areas, there's one builder that looks like it's heading for trouble: Standard Pacific(SPF Quote).

I'm adding Standard Pacific to the Bricks and Mortar mock portfolio as a flagged stock, which means I think the stock should be sold because it is overvalued and has numerous hidden dangers. Buying the stock today is a bet that the company can survive in its current form -- something I don't think is likely. ...