Editor's note: An earlier version of this article failed to mention the time at which the pitch used for Doral Financial was written. The article has been modified, and the Fool regrets this oversight.

Everyone knows that the market has been sinking faster than the Titanic. To survive this downturn, ask yourself this: Are your stocks lifeboats, ready to save you, or dead weight dragging you down to the depths?

Clinging to wreckage
To avoid deadweight stocks, I ran a simple screen on CAPS, the 115,000-member Fool investing intelligence database, looking for companies that seem doomed to sink:

  • I wanted to consider only stocks that our CAPS community classifies as being awful investments. They all carry one-star ratings, the lowest possible out of five.
  • With the credit crunch sinking stocks left and right, I wanted stocks with tons of debt, so I screened for a debt-to-equity ratio greater than 2.
  • I wanted to consider only companies with declining revenue. Each of these businesses has negative three-year revenue growth rates. 
  • Finally, I screened for companies with zero or negative earnings.

Disturbingly, more than a dozen stocks fit the bill. Here are some of the more notable results:

Company

CAPS Rating

Fools Rating Underperform

Debt-to- Equity Ratio

Revenue Growth Rate

Standard Pacific (NYSE:SPF)

*

308 of 573

2.2

(8.9%)

Ford Motor (NYSE:F)

*

2,225 of 5,326

23.8

(0.6%)

Hovnanian (NYSE:HOV)

*

621 of 1,000

3.2

(3.0%)

Great Atlantic & Pacific Tea (NYSE:GAP)

*

84 of 165

2.2

(13.3%)

Doral Financial (NYSE:DRL)

*

138 of 365

2.5

(20.6%)

BlueLinx Holdings (NYSE:BXC)

*

55 of 95

3.4

(11.9%)

American Axle (NYSE:AXL)

*

78 of 128

2.8

(5.0%)

Data from Motley Fool CAPS.

While these stocks certainly aren't recommendations one way or the other, they do provide a great starting point for research. Just make sure you do your own due diligence. To get you started, here's what investors are saying.

Ford is struggling to change its offerings in light of higher fuel costs. CAPS All-Star GunnarVagotis thinks Ford has no one but itself to blame for its troubles:

American auto makers have been resting on their laurels for years all the while getting coddled by the White house. They are getting to the fuel efficiency trend late and again, the US government is giving them until forever to get to where the rest of the world was years ago.

Meanwhile, Doral Financial was an early victim of the credit crunch, and it's fought an uphill battle ever since. But not everyone thinks Doral can survive. CAPS All-Star NeroSageTrade, for instance, wrote last November of a belief that Doral Financial will go bankrupt:

Doral Financial has somehow staved off bankruptcy so far, but that inevitability doesnt seem that far off. Doral reported massive losses in 2007 and should continue to do so for 2 years to come. They have nearly 6 billion in debt and with the way they are burning cash I'd predict less than 16 months of viability left. Bankruptcy seems like their only solution.

However, the company has recapitalized itself, paid off a good portion of the debt Nero was worried about, and has turned things around on the operations front, to become operating-income and net-income-positive in the last reported quarter. You can’t always call a company down for the count.

Homebuilders have yet to show any sign of recovering in the lousy housing market. Because of this, CAPS member deraj83 thinks builders like Standard Pacific deserve the pummeling they've taken:

This stock has been beaten up for a reason. The fundamentals are terrible, and there is no good news on the horizon, but these stocks seem to rally every once in a while for no particularly good reason. I intend to remain negative on the homebuilders until one or more of the large players declare bankruptcy. (My bet is on SPF, maybe BZH, being the first.)

Three for free
That's what investors are saying about these three stocks, but there are thousands of stocks in the markets, and we haven't yet heard from you. Why not head over to the completely free Motley Fool CAPS service, and share your opinions on these or any other stocks?

Related Foolishness:

Dan Dzombak likes ship metaphors but knows nothing about sailing. He definitely has no financial positions in any of the stocks in this article. Try any of our Foolish newsletter services free for 30 days. The Fool's disclosure policy always wears a life jacket.