There are some investors who buy U.S.-listed stocks that are trading below their liquidation values because they believe they can gain from these kinds of investments after the market has reappraised the share prices to near or above the liquidation value.
Should the company fail, these shareholders would, in theory, still be able to benefit from the liquidation value, which will most likely 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 could be interested in the following three companies, as their stock prices are trading below their net current asset value per share (NCAVPS).
Odonate Therapeutics Inc
The first stock short-term investors could be interested in is Odonate Therapeutics Inc (ODT, Financial), a New York-based pharmaceutical developer of orally administered therapeutics for the treatment of metastatic breast cancer.
The stock was trading at a price of $3.11 per share at close on Monday, standing below the net current asset value per share of $3.32 as of the December 2020 quarter.
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 1 out of 10 to its profitability.
Following an 85.69% decrease so far this year, the stock has a market capitalization of $120.06 million and a 52-week range of $3 to $46.50.
Tang Capital Management LLC is the leader amid the company's top fund holders with 40.26% of shares outstanding. The investment company is followed by Boxer Capital, LLC with 14.55% and Wellington Management Group LLC with 9.79% of shares outstanding.
On Wall Street, as of May, sell-side analysts recommend one strong buy rating, one buy rating and one hold rating.
GlycoMimetics Inc
The second stock short-term investors could be interested in is GlycoMimetics Inc (GLYC, Financial), a Rockville, Maryland-based clinical-stage biotech developer of new drugs that are designed to address unmet medical needs amid patients suffering from various blood illnesses.
The stock was trading at a price of $2.16 per share at close on Monday, which stands below the net current asset value per share of $2.34 as of the March 2021 quarter.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 1 out of 10 to its profitability.
Due to a 41.82% decline so far this year, the stock has a market capitalization of $109.26 million and a 52-week range of $2.12 to $5.19.
BVF Inc/IL dominates among the company's top fund holders with 19.95% of shares outstanding, followed by NEA Management Company, LLC with 19% and BlackRock Inc. with 5.47%.
On Wall Street, as of May, sell side analysts recommend two strong buy ratings and three buy ratings.
Graybug Vision Inc
The third stock short term investors could be interested in is Graybug Vision Inc (GRAY, Financial), a Redwood City, California-based clinical-stage biopharmaceutical developer of treatments to cure several ocular and optic nerve diseases.
The stock was trading at a price of $4.26 per share at close on Monday, which is still below the net current asset value per share of $4.40 as of the December 2020 quarter.
GuruFocus assigned a score of 7 out of 10 to the company's financial strength and of 1 out of 10 to its profitability.
The stock price fell by 75% so far this year, determining a market capitalization of $88.22 million and a 52-week range of $3.96 to $37.88.
OrbiMed Advisors LLC is the company's top fund holder with 19.79% of shares outstanding.
On Wall Street, as of April, sell side analysts recommend one strong buy rating, one buy rating and two hold ratings.
Disclosure: I have no positions in any securities mentioned.
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