A venti cappuccino costs $4.85 at a New York City Starbucks (SBUX). There may be some tax on that.

Starbucks trades at $13.57, so it still has a value well above the cost of the coffee mix. That could change. Starbucks has lost about two-thirds of its market value in less than two years. Same-stores sales in the US are falling. The economy and competition from McDonald’s (MCD) are likely to ding Starbucks further.The stock has a ways to fall.

But, there are a number of companies where one share of the stock won’t get an investor the drink.

First on the list is Freddie Mac (FRE). It trades at $4.68. The stock will probably be off further because the firm has a market cap of only $5 billion. If the government puts in an equal amount of money to support its balance sheet, the dilution to current shareholders could cause Freddie Mac stock could go below $2.

Washington Mutual (WM) at $3.44 is not even in the ball park in a trade for one cappuccino. These shares may stay under pressure until the value of homes stops dropping. That probably does not happen until late 2009

E*Trade (ETFC) is at $2.33. The stock is too low. The company just sold it Canadian unit for $511 million. That does a lot to repair the discount broker’s balance sheet. While concerns remain about the company’s mortgage exposure, its core discount brokerage business continues to do well. ETFC is also likely to be a takeover target for Schwab of TDAmeritrade (AMTD).E*Trade should rise up.

In the tech and consumer electronics area, bandwidth infrastructure giant Level 3 (LVLT) trades for $2.63. With a rising demand for broadband carriers, the company’s 50,000 mile plus network is likely to carry a greater and greater volume of VoIP, data, and video traffic. Level 3 has replaced operating management and promises to control costs. It’s a good formula.

Sirius (SIRI) is at $2.01. The market is saying that even a merger with XM (XMSR) is not likely to help revive satellite radio. Each company has over $1 billion in debt. Their primary source of new subscribers is car sales and those are not likely to recover this year. All that, and now drivers are plugging Apple (AAPL) iPods into their car stereos.

Telecom giant Qwest (Q) changes hands at $3.50. Wall St. does not like the stock because the company does not have a high-speed fiber network or cell phone operation like AT&T (T) and Verizon (VZ) do. But, Qwest is the third largest telephone landline company in the US. That makes it a buy-out target for AT&T, Verizon, or a large overseas phone company like Deutsche Telekom (DT) which already owns T-Mobile in America and would like to find a way to increase its US franchise.

Ford (F) may be the second largest car company, but its shares are trading at $4.44. Most forecasters predict US car sales will fall though this year and into next. No cappuccino there.

There are plenty of regional banks on a list of "coffee" stocks. The most well-known are NCC (NCC) at $3.24. After the failure of IndyMac (IMB), anyone investing in local bank stocks needs to have his head examined.

Douglas A. McIntyre

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