hi, I have been keeping up with a company that filed Chapt 11. The company has shown promise and has been able to emerge they will be out in April. is it a good time to invest now or see how it will do later. The stock is very cheap now and has been in the $40 range before they filed
2007-03-01 03:52:26 · 6 answers · asked by Jhard213 1 in Business & Finance ➔ Investing
Keep in mind that 9/11 may have had a huge impact on this company
2007-03-01 06:31:58 · update #1
There are a few ways to handle this:
1. Average into it- Buy a little today. A little more in a week, a little more in a few weeks. This way not all of your eggs are in one basket.
2. Put it all in now- very risky, but with high risk comes, sometimes, high reward. (but also can come big loss as well)
3. Diversify- don't load up on one company no matter how well you think. Buy a little of this company, and then buy some in other sectors to help balance out your portfolio if you lose.
Either way, investing in the market is really gambling. Good luck and be careful.
2007-03-01 04:02:18 · answer #1 · answered by jkersman01 3 · 1⤊ 0⤋
Depends on the company and how much confidence you have in the leadership. For example, Xerox stock dropped to $4 a share just a few years ago. It did a major shift in strategy and is now around $16 a share. Ten years ago it was $100 a share. I don't know if it will ever get that high again, but the current leadership is fairly intelligent.
2007-03-01 04:04:56 · answer #2 · answered by sparkletina 6 · 0⤊ 0⤋
Check their balance sheet. Check their potential earnings. What product do they have? What do they say is gonna bring them out of financial problems? Are their labor costs going down? Just because a stock drops, doesn't mean it is a good buy. Would you buy a handful of dirt? I could sell you some.....cheap. Check news reports. Call investor support at their office. Ask the questions. Do they buy their own stock? If they won't invest in themselves, why should you? What is their volume of sales? What are their assets? If this is all too hard, you better stick to the Big Companies or Mutual Funds.
2007-03-01 04:31:15 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you have the accounting knowledge to read their filings and you believe that it is unreasonable to believe they will not recover from bankruptcy then it is reasonable to make this security part of your portfolio. Historical prices are irrelevant in any company, especially one that has declared bankruptcy. Now that creditors are partial shareholders, the number of shares outstanding has changed. Further, those creditors likely have practical control and have their own goals that do not match your goals. If you have the same management and they drove it to bankruptcy, they will return there again. If they were the victims of circumstance that would be different. Cheap is only cheap if it is deeply deeply discounted to reasonable expected future free cash flows. Remember this firm has shown itself to be especially vulnerable to circumstance or management choices. It is likely working under very poor debt covenants as well.
2007-03-01 04:34:04 · answer #4 · answered by OPM 7 · 0⤊ 1⤋
Mmmhhh...I wouldn't risk my capital in that specific invertion no matter how cheap it can be.
2007-03-01 04:02:37 · answer #5 · answered by Lil' Gay Monster 7 · 0⤊ 0⤋
wait until it comes half way up..
2007-03-01 03:56:16 · answer #6 · answered by SEE YOU LATER 2 · 0⤊ 0⤋