If you spend your day listening to mainstream financial media you could be forgiven for believing that things have never been better for corporate balance sheets - exceptionally high levels of cash and fortress-like conservatism for example. However, in the trenches of reality, from a high-yield and investment grade credit market perspective (and perhaps this is why credit markets are expressing considerably more concern than equities still) there are three trends that point to deterioration and far-from-Nirvana cash-flow protection that should be paid close attention to.
Brett Arends had an excellent piece on MarketWatch yesterday regarding the true state of US corporations. You’ve probably heard the argument before that corporations are sitting on record piles of cash – their balance sheets are in ... Read Post
U.S. corporations have a higher proportion of cash on their balance sheets now, than anytime in the past 50 years, according to the Financial Times. And while M&A activity is picking up, up 27% versus the same period 2010, that does... Read Post
Citi strategist Tobias Levkovich notes that U.S. corporates are building up massive amounts of cash and investors are starting to notice. S&P 500 companies, excluding financials, have remarkably strong balance sheet positions. They ... Read Post