Companies with little or no debt on their balance sheets -- such as Cisco Systems ( CSCO) (no debt until the acquisition of Scientific Atlanta added a modest $6.5 billion to long-term obligations) and Google ( GOOG) (no debt) -- are turning out to be bastions of safety for road-weary investors. Likewise, companies with mainly liquid assets (stocks and cash) or with tangible assets (inventory or land) are looking pretty good too. Simply put, when things turn bad, investors turn to quality.
the changes are good or not." Just look at DuPont ( DD): The chemical giant has seen assets grow 14% in the last five quarters while keeping its debt load essentially flat. That's a good trend. "Good" is a pretty relative term. Small regional banks saw triple digit gains in the last month, in part because the rest of the banking industry was in the midst of such catastrophe. While giants like Washington Mutual (recently bought out by JP Morgan Chase ( JPM)) and Wachovia ( WB) crumbled, BancTrust Financial Group ( BTFG) ( BTFG) saw double-digit returns this quarter, due in no small part to no debt, a growing cash position (up 28% since 2006), and hope for insulation from subprime losses ( research shows that community banks were less likely to dole out subprime loans).