>
  1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Alberto Abaterusso
Alberto Abaterusso
Articles (2474) 

2 Falling Knives to Catch

Analysts on Wall Street suggest acquiring their shares

November 27, 2020 | About:

Shareholders of 36KR Holdings Inc (NASDAQ:KRKR) and Gritstone Oncology Inc (NASDAQ:GRTS) have seen their holdings tumble more than 59% over the past 12 months, but analysts still recommend to buy these two stocks, earning them the name of "Falling Knives."

Some investors acquire shares of falling knives because they believe that a positive, strong share price correction is just around the corner and that huge gains will follow. However, investors should also be aware of the considerable risks that these picks imply, as the chance that the underlying businesses may go bankrupt or be in permenant decline is not negligible.

36KR Holdings Inc

36KR Holdings Inc is a Chinese provider of various internet content and timely information on companies, markets and several industries, including consumer, retail, healthcare and technology, to new economy participants in the People's Republic of China.

The stock price traded at $3.45 per share at close on Wednesday as a result of a 60.1% decline over the past 12 months.

The stock has a market capitalization of $129.34 million, a 52-week range of $2.29 to $12.78 and a 14-day relative strength index of 73, which indicates that the share price is still trading far from oversold levels despite the share price tumble.

GuruFocus assigned a financial strength rating of 6 out of 10 to the company, which is the result of a cash-debt of 5.7 (versus the industry median of 4.7), a debt-equity of 0.07 (versus the industry median of 0.15), a Piotroski F-Score of 1 out of 9 and an Altman Z-Score of 0.12. These indicators tell that there is a concrete risk for the business to go bankrupt within the next two years due to poor operating activities. The business' profitability is ranked by GuruFocus with a score of 4 out of 10.

On Wall Street, the stock has a buy rating with an average target price of $5.25 per share, which represents a 52% upside from Wednesday's closing price.

Gritstone Oncology Inc

Gritstone Oncology Inc is an EmeryVille, California-based biotech developer of various immunotherapies that target specific forms of cancer.

The stock price traded at $3.39 per share at close on Wednesday after it declined by 61.1% over the past 12 months.

The stock has a market capitalization of $128.02 million, a 52-week range of $2.54 to $12.96 and a 14-day relative strength index of 69, with the last indicator telling that the stock still trades far from oversold levels despite the harsh downturn.

GuruFocus assigned a financial strength rating of 3 out of 10 to the company, which is driven by a cash-debt ratio of 2.73 (versus the industry median of 9.73), a debt-equity ratio of 0.36 (versus the industry median of 0.08), a Piotroski F-Score of 2 out of 9 and an Altman Z-Score of -4.21. These ratios indicate that Gritstone Oncology Inc is running a risk of failure which could materialize within the next two years as a result of poor business operations.

On Wall Street, the stock has a medium recommendation rating of buy with an average target price of $11.25 per share, mirroring a 447% upside from Wednesday's closing price.

Disclosure: I have no positions in any securities mentioned.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Alberto Abaterusso


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)