1 Reason To Avoid Daimler
With new cases of the coronavirus spiking in the US and worldwide .
With the already historic unemployment levels and job losses in recent months .
And with many Blue Chip stocks looking vulnerable when they’re supposed to be among the best areas to invest your capital.
There are few safe places to invest today. And this number grows smaller every day this crisis lasts.
The key to continue compounding your investments and build wealth is to keep investing well over time.
This is a huge part of things.
But another huge part of this that few think of is also losing as little capital as possible.
The fewer investment losses you have the more capital you keep. And the more capital you keep the faster you achieve your retirement goals.
In recent articles I’ve shown you several stocks to avoid investing in…
- 1 Reason To Avoid AT&T And Its 7% Dividend
- 1 Reason To Avoid Autozone
- 2 Reasons To Avoid Kraft Heinz
- 1 Reason To Avoid Exxon
- 1 Reason To Avoid This 4.4% Dividend Payer
Today I want to show you another stock to avoid at all costs so you can continue growing your investment portfolio.
1 Reason To Avoid Daimler
It’s Got An Enormous Amount of Debt
Normally in these articles I talk about things like valuation, profitability, cash flow, the affects coronavirus is having on a company’s financials, among other things.
But frankly none of those matter with Daimler (DMLRY) due to its enormous debt load.
As of this writing Daimler is a $60.4 billion market cap owner of Mercedes Benz.
Its most recent quarterly data showed it has $33.2 billion in cash. While it has $157.6 billion in short term and long-term debt and capital leases.
Its debt is 261% higher than its market cap.
Having debt levels this high is rare so let me show you what this really means…
If you take its net debt of $97.2 – debt minus cash – and then subtract this number from its market cap you’re left over with a negative equity value of $36.8 billion.
Meaning, as of this writing its shares are worth negative $36.8 billion after accounting for its debt.
This is unsustainable… Especially since Daimler’s unprofitable on a net income basis. And barely profitable on an operating income and free cash flow basis.
It has so much debt that it’s the 3rd most indebted company on Earth.
This combination of low or negative profits combined with an enormous amount of debt puts Daimler at risk in normal times.
And we’re not living in normal times.
We’ve already shown you several vehicle stocks to avoid during this crisis.
To see those articles and learn why the coronavirus has massive negative effects on the car industry use the links below.
- 2 Reasons To Avoid General Motors
- 2 More Reasons To Avoid Ford
- 3 Reasons To Avoid Volkswagen
- 3 Reasons To Avoid Ford
I want to invest in safe stocks that will be around for decades to help me build wealth over the long term. This helps insure I lose as little money as possible over time.
Typically, this means I invest in companies that have little to no debt compared to their cash and equity.
This large and growing debt makes Daimler stock enormously risky in these uncertain times.
For this reason, I recommend you avoid its stock to keep your retirement portfolio safe.
Click the links below to see the stocks we recommend to Depression Proof Your Portfolio and earn safe investment returns.
- 3 Stocks That Will Earn You High Returns In The Coming Depression.
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- 3 Stocks To Depression Proof Your Portfolio – Stock #3
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Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.