What you will see below:
An update of one of our short models.
This model seeks companies facing dangerously high leverage coupled with negative or declining cash flows. It considers interest expense, capex and short term maturities for additional input.
Solvency shorts can be great short candidates. The key characteristic is that the company may not be viable, economically, given their cash flows and capital structures. These shorts tend to have moderate to higher betas, time horizons that depend on their particular situations, and can have strong down moves as the crisis is recognized. They can also go bankrupt, pushing the stock price close to zero.
Click on this file, below, to see the discussion with related charts:
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