Shares in Level 3 (LVLT) won’t stop falling. The stock is down almost 25% in the last six moths with most of that slide coming since early July.
LVLT seems to be in a great business. It provide a huge highway for the delivery of internet data, video, and voice. In the last reported quarter, LVLT revenue moved from $819 million to $1.035 billion. The company’s net loss was flat at just over $200 million. Acquisitions played a part in the revenue improvement.
What Level 3 has that Wall St. does not like is boat loads of high yield debt, over $.6.8 billion. And, the company is not exactly throwing off a lot of cash.
High yield debt was in favor until a couple of months ago, but that has changed considerably. Even relatively attractive private equity deals are having immense problems getting funded. That makes the market cast a jaundiced eye toward a company like Level 3.
If earnings and cash flow are not good in the current quarter, LVLT could end up with very few supporters.
Douglas A. McIntyre
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.