Goldman’s top 50 Weak Balance Sheet stocks (NYSEARCA:IWM)

Goldman Sachs analysts listed 50 stocks constituents of their “weak balance sheet” basket.

The weak balance sheet basket has underperformed its strong balance sheet basket counterpart by 5 percentage points year-to-date, at 1% compared to 6%, according to a U.S. Weekly Kickstart report.

In addition, certain parts of the equity market are more likely to lag if interest rates keep climbing or stay high, and stocks within this basket have generally struggled, analysts said.

Balance sheet concerns have contributed to the year-to-date weakness of the Russell 2000 (NYSEARCA:IWM), at -2% compared to 6% for the S&P 500 (SP500). The Russell 2000 (IWM) borrow costs equal 5.7%, or 200 basis points above S&P 500 (SP5000) borrow costs.

Also, small-caps have more floating rate debt and weaker cash flow margins.

Goldman analysts listed the constituents of their “weak balance sheet” basket, ranked by their Altman z-score.

The Altman z-score is a measurement used to predict the chances of a business going bankrupt in the next two years. It consists of five ratios: working capital/assets, retained earnings/assets, EBIT/assets, market cap/liabilities, and sales/assets.

These are the constituents of the basket, with data as of April 25, ranked by the lowest Altman z-score within their S&P sectors:

Communication services (XLC)

• Match Group Inc. (MTCH) – Altman z-score: 0.2
• Warner Bros. Discovery (WBD) – Altman z-score: 0.5
• Charter Communications (CHTR) – Altman z-score: 0.6
• AT&T Inc. (T) – Altman z-score: 0.7
• Paramount Global (PARA) – Altman z-score: 1.1
• Verizon Communications (VZ) – Altman z-score: 1.2

Consumer discretionary (XLY)

• Norwegian Cruise Line Holdings (NCLH) – Altman z-score: 0.1
• Carnival Corp. (CCL) – Altman z-score: 0.6
• Caesars Entertainment (CZR) – Altman z-score: 0.6
• MGM Resorts International (MGM) – Altman z-score: 0.9
• Expedia Group Inc. (EXPE) – Altman z-score: 1
• Ford Motor Co. (F) – Altman z-score: 1.1

Consumer staples (XLP)

• Kraft Heinz (KHC) – Altman z-score: 1.1
• Molson Coors Beverage (TAP) – Altman z-score: 1.5
• Keurig Dr. Pepper (KDP) – Altman z-score: 1.5
• J.M. Smucker (SJM) – Altman z-score: 1.7

Energy (XLE)

• Kinder Morgan Inc. (KMI) – Altman z-score: 0.8
• Williams Companies (WMB) – Altman z-score: 0.8
• EQT Corp. (EQT) – Altman z-score: 1.5

Materials (XLB)

• DuPont de Nemours Inc. (DD) – Altman z-score: 1.1
• International Flavors and Fragrances (IFF) – Altman z-score: 1.2

Health care (XLV)

• Viatris Inc. (VTRS) – Altman z-score: 0.9
• DaVita Inc. (DVA) – Altman z-score: 1.6
• Amgen Inc. (AMGN) – Altman z-score: 1.6
• GE Healthcare Technologies (GEHC) – Altman z-score: 1.8
• Baxter International (BAX) – Altman z-score: 2
• Pfizer Inc. (PFE) – Altman z-score: 2
• Revvity Inc. (RVTY) – Altman z-score:2.2

Industrials (XLI)

• American Airlines Group (AAL) – Altman z-score: 0.7
• Dayforce Inc. (DAY) – Altman z-score: 1
• Delta Air Lines (DAL) – Altman z-score: 1.1
• United Airlines Holdings (UAL) – Altman z-score: 1.2
• Boeing Co. (BA) – Altman z-score: 1.3

Information technology (XLK)

• Seagate Tech Holdings (STX) – Altman z-score: 0.5
• Hewlett Packard Enterprise (HPE) – Altman z-score: 0.8
• Gen Digital Inc. (GEN) – Altman z-score: 1
• Oracle Corp. (ORCL) – Altman z-score: 1.9
• HP Inc. (HPQ) – Altman z-score: 1.9
• Intel Corp. (INTC) – Altman z-score: 1.9
• Western Digital (WDC) – Altman z-score: 1.9
• Corning Inc. (GLW) – Altman z-score: 2.4
• NetApp Inc. (NTAP) – Altman z-score: 2.7
• Trimble Inc. (TRMB) – Altman z-score: 2.9
• Jabil Inc. (JBL) – Altman z-score: 3
• Akamai Technologies (AKAM) – Altman z-score: 3.1
• Teledyne Technologies (TDY) – Altman z-score: 3.1
• Qorvo Inc. (QRVO) – Altman z-score: 3.2
• Cisco Systems Inc. (CSCO) – Altman z-score: 3.4
• NXP Semiconductors (NXPI) – Altman z-score: 3.4
• Zebra Technologies (ZBRA) – Altman z-score: 3.7