09-13-2014, 01:01 PM
With all the talk about how interest rates must rise at some point, I thought it would be a good idea to put together a list of companies with no debt. The thesis being,
1) Companies with floating rate debt will experience rising interest obligations
2) Companies selling fixed rate debt to fund buybacks will not experience any direct increase in liabilities, but will find it more expensive to take out new debt to continue buybacks/business as usual
Without further ado, the debt free companies on my watch list are:
NVO
FL
WFM
V
QCOM
PWR (not a dividend payer, but one I'm interested in lately)
I am long most of these companies either by ownership or short put.
I'm aware that leveraging up for cheap can be a good idea in a low interest rate environment, and there's certainly room for debate about whether being debt-free right now is even a good thing. Feel free to discuss the merits or add your ideas to the list.
Dan
1) Companies with floating rate debt will experience rising interest obligations
2) Companies selling fixed rate debt to fund buybacks will not experience any direct increase in liabilities, but will find it more expensive to take out new debt to continue buybacks/business as usual
Without further ado, the debt free companies on my watch list are:
NVO
FL
WFM
V
QCOM
PWR (not a dividend payer, but one I'm interested in lately)
I am long most of these companies either by ownership or short put.
I'm aware that leveraging up for cheap can be a good idea in a low interest rate environment, and there's certainly room for debate about whether being debt-free right now is even a good thing. Feel free to discuss the merits or add your ideas to the list.
Dan