Debt paying down bargain

1)Debt pay down. When a leveraged company selling for a very low P/E ratio starts paying down debt from its cash flow and/or asset sales, then the value of the equity in that company rises automatically and quite dramatically. Explanation:- a)Interest < Interest last year:::Reduction in trailing 4 quarters interest payment wrt last year Interest(Use this when First 3 /4 quarters results are available) or we can use Interest <Interest preceding year (when1/2 quarters result are available) b)Interest latest quarter < Interest preceding year quarter Interest payment in latest quarter is less than interest payment in previous year same quarter c)Interest Coverage > 2/3/4 To have some Margin of Safety .To avoid bankrupt companies popping up in screen d)Debt < Debt 3Years back (Optional: Avoid this screen to find out companies in initial phases of Debt Reduction drive) Debt burden is reducing But companies in initial phases of Debt Reduction drive can be missed out if we use this screen e)Net block < Net block preceding year (Optional: Avoid this screen to find out companies in initial phases of Debt Reduction drive) Companies selling off assets. or Net block < Net block 3Years back

by Anil