There are some investors who buy U.S.-listed equities that are trading below their liquidation value because they are convinced they can gain from these kinds of investments after the market has reassessed the share prices to near or above the liquidation value.
Should the company fail, these shareholders would, in theory, still be able to avoid a loss as the value that results from liquidation will not be lower than the purchasing price. The liquidation value of these so-called net current asset value stocks is calculated as "current assets minus total liabilities."
Thus, short-term investors may be interested in the below companies, as their stocks' prices are standing below their net current asset value per share (NCAVPS).
Assembly Biosciences Inc
The first stock short-term investors could be interested in is Assembly Biosciences Inc (ASMB, Financial), a South San Francisco, California-based clinical-stage biotechnology developer of oral treatments for hepatitis B virus infection in the United States.
The stock was trading at a price of $4.84 per share at close on Thursday, standing below the net current asset value per share of $5.34 as of the December 2020 quarter.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength. With regard to the profitability of operations, a three-year revenue growth rate of 63.8% (versus the industry median of 2.3%) is the best performing ratio.
Following a 66.8% decrease that occurred over the past year, the stock has a market capitalization of $185.11 million and a 52-week range of $4.31 to $27.84.
BlackRock Inc. leads the group of the company's top fund holders with 8.43% of shares outstanding. It is followed by Armistice Capital, LLC with 7.95% and Consonance Capital Management LP with 5.97%.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $11.60 per share.
Lumos Pharma Inc
The second stock short-term investors could be interested in is Lumos Pharma Inc (LUMO, Financial), an Austin, Texas-based clinical-stage biopharmaceutical developer of therapeutics for the treatment of pediatric growth hormone deficiency and other rare diseases.
The stock was trading at a price of $12.69 per share at close on Thursday, which stands below the net current asset value per share of $13.96 as of the December 2020 quarter.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 1 out of 10 to its profitability.
Following a 78.23% increase over the past year, the stock has a market capitalization of $105.65 million and a 52-week range of $6.74 to $36.72.
Deerfield Management Co is the leader amid the company's top fund holders with 11.28% of shares outstanding. It is followed by NEA Management Company, LLC with 6.35% and Blackstone Group L.P. with 5.64%.
On Wall Street, the stock has a median recommendation rating of buy with an average target price of $31.50 per share.
UTStarcom Holdings Corp
The third stock short term investors could be interested in is UTStarcom Holdings Corp (UTSI, Financial), a Chinese telecom infrastructure provider in the People's Republic of China, Taiwan, India, Japan and internationally.
The stock was trading at a price of $1.70 per share at close on Thursday, which is more than 15% below the net current asset value per share of $2.03 as of the June 2020 quarter.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and of 2 out of 10 to its profitability.
Due to a 21.64% decrease that happened in the share price over the past year, the market capitalization now stands at $61.07 million and the 52-week range is $0.82 to $2.54.
Jim Simons (Trades, Portfolio) is the leader amid the company's top fund holders with 3.66% of shares outstanding, followed by Geode Capital Management, LLC with 0.18% and California Public Employees Retirement System with 0.17%.
On Wall Street, the stock has one recommendation rating of buy with a target price of $2.50 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 Stocks Trading Below Intrinsic Value
- A Trio of Capital-Intensive Stocks to Consider
- 3 Stocks Trading Below Their Earnings Power Values
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