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Easy Prey on The Net

Some sites for vulture investing.

Finding value in near-dead companies may not be everyone's idea of fun, but with a record number of bankruptcy filings in the past year and an economic recovery in the offing, it may be a good time to take another look at vulture investing. If history is any guide, some of those companies that filed for Chapter 11 protection just may rise again, emulating such comeback kids as Federated Department Stores and Texaco. Is Chiquita definitely muerto? Will Kmart still be around in 12 months? Here are a few sites to help you decide.

InterNet Bankruptcy Library

Unless you've decided to devote the rest of your life to vulture investing, you'll probably want to pass on the $45-an-issue company-specific newsletters offered here by the Bankruptcy Creditors' Service, which closely follows restructurings. However, 30-day free trials are available for a more general $1,250 annual newsletter called the Troubled Company Reporter, a daily compendium of bankruptcy news. Judging by a sample issue, the Reporter is a fairly comprehensive review of recent stories in the national and regional press concerning high-profile restructurings. For readers who want to avoid every possibility of their own brush with the bankruptcy code, there are also free e-mail newsletters featuring a few of the day's top stories from Troubled Company.

In addition to a weekly bankruptcy newsletter, publisher New Generation Research offers individual reports on struggling companies that are available by subscription or on a one-off basis. Plan Summary Report and the Full Reports seem to offer the most value to the investor, since they include information about the company's plan for getting out of bankruptcy.

The Turnaround Letter

If you'd rather leave the heavy lifting to someone else, you may want to check out another offering from New Generation, a monthly investment newsletter specializing in turnaround stories. A 30-day free trial is available. Editor and publisher George Putnam III is a securities lawyer turned publisher who focuses on “big name companies in temporary trouble whose stock prices are more a reflection of panicky PR than true prospects for profit.”

Standard & Poor's

Standard & Poor's offers recordings of its analysts' conference calls and can sometimes be a rich source of analysis concerning companies in financial difficulties. Although the analysts are as circumspect as one might expect people to be whose words can send a company's reputation into a tailspin, the interplay between questioners and the analysts can provide an illuminating view of which aspects of a given situation concern the Street most. To check out a call, click on the “Events” tab.

Moody's, S&P's competitor in the credit-rating game, offers a free feature that can be useful to the casual distressed company researcher. Type in any company name in the quick search and in a click or two you'll get a list of past rating actions. Even if you don't know your Ca's from your Caa1's, the no-nonsense headlines offer a quick look at how a given company's condition is evolving.

Bankruptcy: What happens when public companies go bankrupt?

This won't help you pick a survivor, but if one of your clients finds a potential Chapter 11 in his portfolio, this online brochure from the Securities and Exchange Commission does provide a simple, straightforward explanation regarding the basics of corporate bankruptcy. To find the article, click on Online Publications under the Investor Information block.

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