2 Risky Industries and an Opportunity

Frisk Stress Index

“You probably won’t read anything like this in the Wall Street Journal or elsewhere that we’re aware of. This is good data gathered in the trenches and is flashing warning signs.”

That’s what Credit Today magazine had to say about the new CreditRiskMonitor FRISK® Stress Index in a recent review. They went as far as calling it “the holy grail of leading indicators.”

We’re honored, of course, but what does the index mean to you?

Well, not to be a broken record, but public company risk continues to rise. That rising risk means potential customer defaults or loss of strategic suppliers.

When Credit Today took a look at the index last fall, U.S. public company risk had risen 50% since the start of the Great Recession. Today, it’s up 85%. See the latest FRISK® Stress Index chart here.

So where actually is the risk?

Here are a couple of hot spots you may find interesting, at the 2-digit SIC-code industry level. (You can also view risk for more detailed sub-sectors.) The index also can point out less risky industries and countries – so we’ve highlighted one of them, too.

Oil & Gas Extraction (SIC 13)

Peabody Energy, which filed for bankruptcy last week, is just the latest in a long line of energy companies to go under. The risk in oil and gas extraction, not surprisingly, is staggering.

U.S. risk in this industry is 652% higher than it was in 2007! There are 60 oil and gas companies in this group with a FRISK® score of 1 – the highest level of risk. Names on the risky list include Emerald Oil, Denbury Resources Inc., Northern Oil and Gas.

View the Stress Index for Oil & Gas Extraction

To see the full list of companies driving the risk, click on the number of companies link above the stress index graph.

Printing, Publishing and Allied Industries (SIC 27)

Do you love to read online? You’re not alone – and it’s costing the printing and publishing industry. The risk of bankruptcy in this industry is more than twice the overall U.S. company average, and is up 267% since the start of the Great Recession.

See the risk trends in Printing & Publishing

Air Transportation (SIC 45)

Here’s an example of an industry that’s not riskier. In fact, its risk has dropped dramatically over the past 4 years and is significantly less risky than during the recession. The air transportation industry was suffering extreme financial stress 7 years ago – about 7 times the typical bankruptcy rate – but today is less than average. Check out the visual here:

See the risk trends in Air Transportation

 

So what’s happening with YOUR industry, and those of your customers and your suppliers? And what about your global risk?

Use the new FRISK® Stress Index for a quick look at the risk trends by country or industry since 2007 – then drill down to see the risky companies so you can take action.

Learn more about the index and check your risk today

 

About CreditRiskMonitor

CreditRiskMonitor is a financial news and analysis service designed to help professionals stay ahead of public company risk quickly, accurately and cost-effectively. More than 35% of the Fortune 1000, plus thousands more worldwide, rely on our commercial credit reporting and predictive risk analytics for assessing the financial stability of over 58,000 global public companies.

At the core of CreditRiskMonitor’s service is its 96% accurate FRISK® score, which is formulated to predict public company bankruptcy risk. One of four key components calculated in the FRISK® score is crowdsourced subscriber activity. This unique system tracks subscribers' patterns of research activity, capturing and aggregating the real-time concerns of what are essentially the key gatekeepers of corporate credit. Other features of CreditRiskMonitor’s service include timely news alerts, the Altman Z” score, agency ratings, financial ratios and trends. CreditRiskMonitor’s network of trade contributors provides more than $135 billion in trade data on their counterparties every month, giving them visibility into their biggest dollar risks.