Hunting Zombies?

[Mark Jr.]

I've been thinking lately of looking for zombies who have levered up, to do buybacks or acquisitions and don't have the FCF to service the debt in a rising interest rate environment or who will simply come back to earth once the broader market rolls over.

 

A good example (in the rear view mirror) is Endurance International Group (EIGI), with debt-to-equity north of 12:1, no earnings, stock down 80% from the highs and are now putting themselves up for sale.

 

Probably should point out that my idea is to short these companies on the way down, not buy them at the bottom (i.e. not planning on loading up on EIGI but I did have puts on them at various points in their decline).

 

I thought there would be a stock screener that would have parameters like debt service costs or cumulative buybacks but I haven't been able to find that, I can't even find one that lets me screen on lt debt/equity.  I guess I just have to go hunting through filings and read articles.