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NI DBON on bberg.
Would also get on the distribution lists from the big HY/distressed trading desks.
Could also do a screen for some of the following: Debt/EV > X, EBITDA-Capex-Intex X, Bonds or TLs trading below X, etc.
Lol Z-score
Might I ask why you are looking? Given your questions I would stay away from investing in any and start learning fundamentals of restructuring (ie Moyer).
@Mrb87 I am looking to get started in distressed investing so was hoping to see how others screen for opportunities. That was the purpose of the post. I have already read Moyer's book which is very helpful in evaluating an opportunity once it has been identified. However, there are hundreds of companies out there considered to have high credit risk, how would you screen for a handful before starting fundamental analysis (or applying Moyer's concepts)
@Cries, thanks for the tips. Do you have any specific trading desk newsletter you recommend? Are they free? Also - Moyer actually mentions Z-score as a screening tool for distressed opportunities in chapter 8 of his book under "predictive models." That is why I referred to it in my original post. Is it not used in the industry?
I don't understand what you mean by "getting involved in distressed investing." Do you mean at a personal level? Again, I'd stay away. The money is made by the guys who are intimately involved in the process (or can otherwise try and influence it), who have legal counsel and are signing NDAs and PSAs. Investing in distressed situations from your PA is like bringing a knife to a gunfight.
Furthermore, again, your questions evince a lack of basic understanding of distressed situations that is worrying.
Not at a personal level. I am currently an IBD analyst looking to move to a distressed debt fund. I want to learn as much as I can before interviewing so trying to learn the investment process so I can come up with ideas that I can pitch during my interviews. I am new to the distressed world and do not directly deal with these situations (not in LevFin or Rx), thus my naivety. Was hoping experienced professionals in the industry could help me understand the process better.
I have already read Moyer and in the process of reading Whitman.. but I feel these books are good for assessing a distressed situation once you have a handful of names. To get down to the handful of names seems tough (at least to me since I haven't dealt with distress before). So that is the purpose of the post, to see how people screen for these opportunities. Your insight would be very much appreciated.
Honestly, there's such a dearth of distressed situations these days that they are all pretty well-known, and it's not too difficult to find them if you're genuinely interested in investing. (Granted, the recent oil price collapse is really expanding the universe, but again, that's no secret.) They're well reported on many blogs; in news sources; and preset screens on CapIQ.
You're not going to blow away any distressed debt funds by finding something they don't know about. They'll care more that you understand valuation and restructuring fundamentals -- which you clearly need to continue to learn -- than pitching them a great investment idea. Focus on that and you'll be better off handling whatever case study they give you.
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