The "Great American Cash Pile" Is a Mythby MICHAEL E. LEWITT
The truth is, U.S. companies are dangerously leveraged after surrendering to their own greed and that of activist investors whining for share buybacks and dividend hikes in lieu of investing money back in their businesses.
Moody's and Standard & Poor's are finally catching on to what I've been warning about for a couple of years: U.S. corporations are
more highly leveraged now than before the 2008 financial crisis.
This leverage is disguised by low interest rates, but all of this debt has to be repaid and many companies are generating insufficient cash flow to do so.
In fact, the so-called vast cash hoard of Corporate America is highly concentrated among a small group of just
five companies: Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT), Alphabet, Inc. (Nasdaq: GOOG), Cisco Systems Inc. (Nasdaq: CSCO), and Oracle Corp. (NYSE: ORCL) – holding more than a third of it.The average junk-rated company has little cash, too much debt and no free cash flow to repay its debt and is only being kept afloat by low interest rates. This is the real story that Wall Street and its prostituted analysts won't tell.
Source: Money Morning
http://moneymorning.com/2016/05/22/no-o ... -say-this/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"