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Three products that are probably bad bets in this environment are private jets, helicopters and golf carts. Add in a large captive finance arm and an auto parts unit and you have Textron (NYS: TXT), the latest hobgoblin to join the dividend slasher parade and corporate Deathwatch. The Piqqem Sentiment on Textron is hard negative. The good folks at Ockham's Research hammer home these points and more.Textron has had trouble in the past accessing commercial paper markets (and it's surely not having trouble now, right?) and raising equity capital. More than 50% of the assets on the books of its captive finance arm are non-performing and that could worsen as more companies that owe it money start to tip over in the various blighted industries it services. Add a slashed dividend to spook value and institutional investors. The upshot? Textron is basically ready to keel over, unfortunately.
But the U.S. government will likely bail it out because, frankly, it's too important to national defense to fail (the Bell Unit makes helicopters and armored vehicles). So it will join the ranks of other TARP recipients who are too big to fail, too interconnected to fail, too important to China to fail, and turn into a zombie company on the taxpayers' books. Welcome to the new Japanese Economy, America!
Alex Salkever is the Director of Research at Piqqem.com, a Wisdom of Crowds stock research tool and investing community.
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