{"id":17819,"date":"2023-06-03T20:17:58","date_gmt":"2023-06-04T00:17:58","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/too-much-debt-coming-due-and-not-much-cash-on-hand-these-10-companies-face-a-rough-year-ahead\/"},"modified":"2023-06-03T20:17:59","modified_gmt":"2023-06-04T00:17:59","slug":"too-much-debt-coming-due-and-not-much-cash-on-hand-these-10-companies-face-a-rough-year-ahead","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=17819","title":{"rendered":"Too much debt coming due and not much cash on hand: These 10 companies face a rough year ahead"},"content":{"rendered":"
\n

Jefferies & Co. offered a list of the top 10 companies with low cash and high near-term debt maturities this week that it\u2019s advising investors to avoid.<\/p>\n

The top 10 are: Hewlett Packard Enterprise
\n HPE,
\n +3.89%<\/bg-quote>,<\/span>
\n Stanley Black & Decker
\n SWK,
\n +7.15%<\/bg-quote>,<\/span>
\n Evergy
\n EVRG,
\n +0.93%<\/bg-quote>,<\/span>
\n McCormick
\n MKC,
\n +1.00%<\/bg-quote>,<\/span>
\n NiSource
\n NI,
\n +0.34%<\/bg-quote>,<\/span>
\n Sempra
\n SRE,
\n +0.27%<\/bg-quote>,<\/span>
\n Celanese
\n CE,
\n +8.10%<\/bg-quote>,<\/span>
\n Ameren
\n AEE,
\n +1.01%<\/bg-quote>,<\/span>
\n Eversource Energy
\n ES,
\n +1.71%<\/bg-quote>
\n and DTE Energy
\n DTE,
\n +1.51%<\/bg-quote>,<\/span>
\n according to Jefferies global head of microstrategy, Desh Peramunetilleke.<\/p>\n

\n

The following chart provided by data provider BondCliQ highlights just how much debt is coming due in the near term for those companies. The list is ordered by ticker alphabetically with each name split into maturity buckets of their\u00a0outstanding debt. <\/p>\n

The blue bucket is debt that matures within a year.<\/p>\n

<\/p>\n
<\/p>\n
<\/div>\n<\/figure><\/div>\n

Eversource Energy, the Boston, Mass.-based electric utility, leads the pack with $2.705 billion of debt maturing in the next year. <\/p>\n

The company\u2019s total long-term debt stood at about $21 billion as of March 31, according to the company\u2019s first-quarter filing with the Securities and Exchange Commission. <\/p>\n

The company had $36 million in cash on that date and negative cash flow of more than $1 billion. <\/p>\n

Peramunetilleke\u2019s note highlighted that companies with cold hard cash are currently an overlooked sweet spot. <\/p>\n

\u201cRates and yields are rising sharply in the U.S. and Europe, with both interest income and interest expense set to rise, making cash the king,\u201d he told clients in a note.<\/p>\n

\u201cAfter witnessing zero cash rates for most of the past decade, cash on balance sheet is starting to earn a healthy return. Indeed, cash-to-total asset has been the best long-short factor this year for global equities, led by U.S.,\u201d he said.<\/p>\n

Companies with cash-rich balance sheets also saw far better first-quarter results, while highly geared companies \u2014 those with higher leverage that could be at risk from financial troubles if profits fall or rates rise \u2014 have seen the biggest underperformance and likely will be hit by rising debt costs, said Peramunetilleke.<\/p>\n

Looking across regions, the analyst found that the U.S. and Europe are the most-geared, with the least amount of cash on balance sheets. <\/p>\n

\u201cYet given the significant difference in short-term debt (Europe 24% vs U.S. only 11%), we anticipate a circa 9% reduction in MSCI USA\u2019s net interest cost (due to higher interest income) while expecting a circa 8% increase for DM [developed market] Europe,\u201d he said.<\/p>\n

The strategist also offered a list of \u201ccash-rich\u201d U.S. companies that are expected to benefit from that cushion.<\/p>\n

They are: Activision Blizzard
\n ATVI,
\n +0.37%<\/bg-quote>,<\/span>
\n ServiceNow
\n NOW,
\n +0.96%<\/bg-quote>,<\/span>
\n General Electric
\n GE,
\n +1.08%<\/bg-quote>,<\/span>
\n Amazon
\n AMZN,
\n +1.21%<\/bg-quote>,<\/span>
\n Fortinet
\n FTNT,
\n -0.74%<\/bg-quote>,<\/span>
\n Airbnb
\n ABNB,
\n +5.26%<\/bg-quote>,<\/span>
\n VMware
\n VMW,
\n +2.96%<\/bg-quote>,<\/span>
\n Keysight Tech
\n KEYS,
\n +0.07%<\/bg-quote>,<\/span>
\n Bruker
\n BRKR,
\n +0.63%<\/bg-quote>
\n and Costco
\n COST,
\n -0.00%<\/bg-quote>.<\/span>\n <\/p>\n

For more:<\/strong> 10 stocks that will benefit from higher earnings on company cash, and 10 that have a debt problem<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Jefferies & Co. offered a list of the top 10 companies with low cash and high near-term debt maturities this week that it\u2019s advising investors to avoid. The top 10 are: Hewlett Packard Enterprise HPE, +3.89%, Stanley Black & Decker SWK, +7.15%, Evergy EVRG, +0.93%, McCormick MKC, +1.00%, NiSource NI, +0.34%, Sempra SRE, +0.27%, Celanese […]<\/p>\n","protected":false},"author":1,"featured_media":17820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-17819","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nToo much debt coming due and not much cash on hand: These 10 companies face a rough year ahead | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Jefferies & Co. offered a list of the top 10 companies with low cash and high near-term debt maturities this week that it\u2019s advising investors to\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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