Herb's Hotline: The Value of Bond Analysts - TheStreet

Hotline hoopla: Now, let's see what spin the Street puts on the report from

Lehman Brothers

convertible bond analyst Ravi Suria. (A very gutsy report, at that, considering the firm's stock analyst, Holly Becker, has a buy on

Amazon.com

(AMZN) - Get Report

. But, hey, memo to Lehman: Use it to show just how independent your analysts really are!) Any bets that the stock analysts focus on the company's ability to narrow its losses, rather than its ability to raise cash? I'd take that bet because that's

all

the stock side is ever interested in. (Or mostly interested in!)

But for highly leveraged companies (and as you can see in my

Extra, Amazon sets new parameters for high) more important than earnings is the balance sheet and cash flow and a deep-in-hock company's ability to cover its debt. That's why you should watch the red flags being raised by a good bond analyst any day over the green flags being raised by the stock side ...

Amazon isn't the only company in Suria's sights. Overlooked in the Amazon swirl was that he also stabbed his knife into the recent convertible preferred stock deal from

eToys

( ETYS), recently mentioned in this

column. "We believe that the structure of the convertible preferred stock clearly indicates the desperate need for financing that the company faces and the total lack of reasonable financing alternatives," he wrote. "This type of conversion feature, occasionally called the exploding put or death spiral, is usually among the most expensive forms of financing that a company can have."

Onward:

Staples

(SPLS)

downgraded this ay-em by

Merrill

. Like that should be any surprise? With prices at its

Staples.com

higher than

OfficeDepot.com

on certain key items, why (as I pointed out

earlier this week ) should any price-conscious shopper like yours truly shop there? When you have Twiddle-dee and Twiddle-dum, the difference, in the end, is the weight of my wallet ...

Race to the finish: Took my kids to the

Nascar Silicon Motor Speedway

at the Palisades Center near Nyack, N.Y. This is the real thing: Race-car simulators. Feels like the real McCoy, so much so that I almost lost the dinner I hadn't yet had as the sweat was pouring off my forehead. You feel like you're driving these cars at 180 miles an hour -- spinouts, crashes and all. My son is 11. He has never driven. My daughter will soon be 16; again, never driven (can't get a learner's permit in New Jersey

until

you're 16). And I've driven for 33 years. The race lasts six minutes (six minutes in hell, if you ask me!) I kept the thing floored the whole time but felt kinda sorry for the kids 'cause they had never driven; heck, they couldn't even get the engine started without the help of the attendant! But a race is a race and ... darned if I didn't come in

dead last!

...

Did someone say Nascar?: One recent item

here that questioned the relationship between

International Speedway

(ISCA) - Get Report

and

Nascar

said that the relationship between the two is almost as if the

NBA

commissioner owned more than half the teams in the NBA and decided that his teams would be first in line on draft day. Close but no cigar, says reader

Mike Spivey

, who thinks a better analogy would be if the NBA owned over half of the stadiums, promoted the games and then paid the teams whatever they felt like paying. And set the schedule." Better yet, says

Rob O'Leary

, would be "a hotel franchiser with a great brand, e.g., Comfort Inn or Holiday Inn, that keeps a large number of the top markets for a sister division or itself vs. granting them to franchisees." But the best comes from

Steve Cole Smith

, executive editor of

Auto World

weekly (and former executive editor of

Car and Driver

) who uses this analogy: "Suppose

McDonald's

(MCD) - Get Report

owns every cow in the world, yet has attempted to convince

Burger King

that it will get fair and equal access to the beef." Imagine

that

. ...

And speaking of Burger King: The company that owns BK is spinning it off as a public company. I have a

long

history with this company. When I covered the food beat for the

Chicago Trib

I went down to Miami and talked to the whole gang, back then, and did a great piece (if I don't say so myself) on the late James McLamore, who co-founded the company. It was always

so

hard for them to compete against Mickey D's. In recent years BK appears to have made real headway. (Though I don't have a clue why BK doesn't have frozen yogurt, or something like that! Can't imagine how many drive-through dollars go to ice cream cones at McDonald's. I know my family pays its fair share.) My history goes beyond that, however. I was raised in the minuscule Miami suburb of West Miami. My house was seven blocks from the second BK ever built. We had more than our share of dinners there. (We didn't have much moola and it was

really

good back then. The shakes were real!) The same building at 61st Avenue and Southwest Eighth Street is still there, but last time I drove by it was a Cuban food joint.

While we're on food, one last round of Tuna Talk:

Vince Flanders

suggests adding thyme to tuna salads. "Gives it a wonderful, healthy, clean taste," he says. "Try it." And yesterday in my haste, I said that albacore tastes as good as chunk light. (Thanks

Matt Savino

for pointing out the err of my ways.) What I meant to say is that I don't like the taste of albacore ... tastes too much like fish! Don't even ask me what I meant by that! Finally, we hear from

Keith Kurtz

, who writes: "Let me get this straight. On June 15 you start your series on Tuna Salad. The very next issue of the

Washington Post

Food Section, whose articles are planned weeks in advance, is published on June 21, and what do you think is on the front page? An article on 'building a better tuna salad'? Coincidence or inside information?" Inside information, of course. I hacked my way into the Washington Post's publishing system and found that the most compelling story they were sitting on -- the one I wanted to steal the most -- was about, of all things, how to build a better tuna salad! The truth is finally out ... and speaking of out, that pretty much describes what I am with information for this edition of ... The Hotline.

Please join me and Paul McEntire, president of the Bearguard Fund, as we show you why the shorts can help you save your shirt at the first RealMoney.com Investor's Conference. McEntire, a veteran short-seller, started Bearguard last year. It's the first short-only stock mutual fund. We'll both share our tips on how to spot trouble, followed by my questions to Paul and your questions to both of us.

Surviving and profiting in treacherous markets

June 28th, 2000, Marriott World Trade Center, New York City

For information and registration, go to

Real Money Conferences .

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.