Seven Stocks To Sell Immediately

And Revlon was a great company – so great, in fact, that Perelman used its cash and balance sheet to leverage the company to the hilt. And that, folks, is the essence of financial engineering. Why did he do this? Because he could. Because the act of saddling Revlon's balance sheet with $3.39 billion in debt and only $85 million in cash helped Perelman buy and leverage other companies, as is his won't.

The problem with Revlon – which unfortunately now is a very toxic stock – is that all this financial engineering is backfiring, as it is for Perelman himself. Ron's leverage across all his "assets" has come back to haunt him. His worth has plummeted to just $4.5 billion from a high of almost $20 billion.

But don't cry for Ron: He's still rich.

As for Revlon… not so much. In fact, the only thing Revlon's stock has going for it is the huge short position investors have on it. Maybe Ron will get the Reddit crowd to engineer a short squeeze so the stock pops and he can issue some more shares. That would be the ultimate engineering feat.

But don't count on it. And don't count on Revlon. It's a toxic stock. Sell it.

Just like some of the biggest, most popular companies aren't worth owning, there are often small, overlooked firms with "hyperdrive" profit potential you definitely want to own.

1 2 3 4
View single page >> |

I laid out seven signs a stock is bad news for my free Total Wealth subscribers –  more

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.