While people go to major league games in bad times as well as good, smaller leagues are beginning to feel the pain of the recession. The economy's first casualty seems to be the 22-year-old Arena Football League, which suspended its 2009 season Monday. The decision came despite the league's assurances last week that the season would go on.

Benching the 16 teams will be hard on the players and their owners (rocker Jon Bon Jovi among them). It's also rough on their die-hard fans who just can't get enough football. Arena's cancellation means that American and National Football Conference teams really are the only game in town.

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Public companies can also get sidelined by suspensions. The

NYSE

and the

Nasdaq

sometimes take a stock off their rosters, but usually only after notices that the company has put itself in jeopardy. And when a delisting warning comes out of the blue, a stock can get hammered and its die-hard investors can take a bath.

Public companies can get delisting notices for failure to file a quarterly report on time. Another reason is a drop in the share price below $1 for a period of time -- a bigger danger when the whole market takes a big dive. And while a stock above $5 doesn't have as much risk of becoming a penny stock, falling below that threshold can spell trouble, because many mutual funds automatically drop sub-$5 stocks.

Late last week, the telecom

Nortel Networks

(NT)

reported it faces delisting by the NYSE if it cannot bring its stock price above $1, a threshold it hasn't seen since Nov. 10.

In general, investors have gotten nervous about tech stocks, given the credit crunch and slower spending by businesses. But I've found opportunities and gotten wins among the reliable names with smart management and solid cash flow, such as

Texas Instruments

(TXN) - Get Report

,

Microsoft

(MSFT) - Get Report

and

Cisco

(CSCO) - Get Report

.

So how do some stocks get benched? Delisting warnings are more likely in a recession, when businesses struggle to meet their targets and maybe even miss an earnings report date.

Failure to meet Wall Street estimates is not a reason for a company to delay its quarterly filing. But meeting targets even during good times can make managers feel like they've been backed into a corner. In July,

Cadence Design Systems

(CDNS) - Get Report

, the leading supplier of software to chipmakers, traded at nine times expected 2008 earnings of $1.51 a share -- a Wall Street estimate that proved to be unrealistic.

But Cadence didn't reveal its problems until October, when it delayed its third-quarter report in order to correct an earlier filing: Management said it had improperly reported some revenue too early. Cadence may have gotten ahead of itself to meet first-quarter targets when business began falling off.

The Nasdaq threatened to delist the stock for failure to file. Last week, the company caught up. But the stock now trades below $3 -- within the penny-stock danger zone and a fumble for a stock that ended 2007 at $17.01. Analysts now expect Cadence to post an EPS loss for 2008.

When sizing up undervalued stocks, it helps to go beyond the summary of P/E ratios and cash flow statements in search of potential flaws in the game plan. Two of the best sources of information are the CEO and the chief financial officer: Listen to their quarterly conference calls. Unlike league managers, executives are legally bound not to mislead investors about their outlook.

Investors can pick up hints of potential problems during the question-and-answer sessions with analysts, when CEOs will sometimes mention the trouble signs to watch for in the coming months. And the analysts can tip off problems, too.

Looking back at Cadence's first-quarter earnings call in April, an analyst complained about the company's decision to stop giving as much information about the types of revenue being reported. The analyst said he was afraid Cadence could mask how it was recognizing revenue, "which could allow you to achieve the numbers, but could make things more volatile and potentially more risky as you move forward."

While Cadence may not have intentionally tried to make its numbers, that analyst's comment proved to be a red flag to a revenue-reporting issue that nearly sidelined a company and left its shareholders holding season passes to an empty stadium.

Always remember: Life is a journey, enjoy the ride!

Lenny Dykstra manages Nails on the Numbers, a subscription service sold by TheStreet.com. Mr. Dykstra is 91-0 in his options picks this year. Click here for a free trial to Nails on the Numbers. Mr. Dykstra writes regularly about options trades for TheStreet.com

.

At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."