I have been buying stock in a US company with no debt (the only liability is a rental agreement for their offices).
If you are curious the company is AVGR (Avinger) for any stock hounds. The shares are priced for liquidation at .40 cents. Avinger has no bonds or debt - just short term liabilities like rent.
My only short term fear is a bankruptcy filing.
I’m not sure what you mean by debt. If you mean it didn’t owe money to anyone, then there would be no point in bankruptcy.
If you mean it took out no loans, then I’d guess. Quite probably some company didn’t have the money it needed to pay the taxes or wages it owed particularly if it suffered something like a fire or flood.
I think you should also be concerned about default … that 40¢ stock might only be worth 2¢ tomorrow if they don’t pay their rent …
Bankruptcy filing, in part, protects the filer from creditors … you say they have no creditors so I’m not clear from whom they would need protection from … if they don’t pay the rent, they get kicked out of the offices …
Default and bankruptcy do tend to go hand-in-hand … but they are separate and different things … meaning they can default and not go through bankruptcy …
Helpful would be you posting their most recent Income Statement and Balance Sheet … but you’ve already looked them over and the risk fits your portfolio well enough … you might win or you might lose … but no worries, that’s what diversified portfolios are good for, you can absorb any loss and still be on top …think of the tax savings [wink] …
I just discovered a bank loan that is not listed as “debt”.
Since you now have a different set of parameters than in your OP, this is no longer a valid question. Closing this one and you can start a new one.