Tesla And Netflix Bonds Are Likely A Smarter Bet Than Their Shares
Summary
Research shows that the common stocks of companies with junk credit ratings and/or convertible debt outstanding are usually overpriced compared to their bonds.
The current valuations of Tesla and Netflix shares compared to their debt are good examples of this.
Understanding credit ratings and capital structure can help you pick winning stocks.
If you own Tesla or Netflix stock, consider selling and switching to the bonds for a superior risk-adjusted return.
...
https://seekingalpha.com/article/4244261...bet-shares
Summary
Research shows that the common stocks of companies with junk credit ratings and/or convertible debt outstanding are usually overpriced compared to their bonds.
The current valuations of Tesla and Netflix shares compared to their debt are good examples of this.
Understanding credit ratings and capital structure can help you pick winning stocks.
If you own Tesla or Netflix stock, consider selling and switching to the bonds for a superior risk-adjusted return.
...
https://seekingalpha.com/article/4244261...bet-shares
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