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Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (255)	3/31/1999 12:03:00 AM
From: Q.	Read Replies (2) \| Respond to of 477

Razor & Bob, re. screening for floorless convertibles, it can be done, and it is done. It's not as easy as screening based on current ratio and similar numbers from financial statements. You can do the latter easily, with one of the numerous screening tools available. Floorless convertibles can sometimes be identified from language in news releases, although more often they are revealed only in SEC filings. So the way to screen for them is to first reduce your universe of stocks using market cap, eps, etc. to limit yourself to those that might possibly do these deals, then open up all the prospectuses and/or 8-k's filed by these companies, looking for key phrases. This screening process would really be too much work for any one individual, but if you've got a big team to share the work, and an automated search site to do the harder parts for you, it actually goes quite smoothly. You turn up almost every shortable stock that does a floorless convertible. Plus, you identify which are the most attractive to short, and the optimum time to short. Details here: members.aol.com

To: Razorbak who wrote (255)	3/31/1999 12:27:00 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 477

Key indicators: The original objective was to quickly identify those firms that might be at risk for bankruptcy within the year and differentiate at-risk co's from firms that are unlikely to fail. The ones that are risky could then be run thru the predictor models. This quick scan would be used on potential shorts or value-type longs. Many of the ratios and indicators we've discussed look promising for this purpose. Management analysis, product/marketing evaluation...these are definitely important causes of failure, but how do you do this analysis quickly and effectively from a distance?