There are some investors who invest in U.S.-listed stocks that are trading below their liquidation values because they believe they can get a huge return out of these stocks after the market has reassessed the share prices to near or above the liquidation value.
Should the company have financial problems leading to insolvency, these shareholders would, in theory, still be able to take advantage of the liquidation value, which will most likely be higher than the acquisition 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 want to consider the two companies listed below, as their stock prices are trading below their net current asset value per share (NCAVPS).
Eledon Pharmaceuticals Inc
The first stock short-term investors may want to consider is Eledon Pharmaceuticals Inc (ELDN, Financial), an Irvine, California-based clinical-stage biopharmaceutical developer of medicines for the treatment of autoimmune disease and amyotrophic lateral sclerosis.
The stock was trading at a price of $6.50 per share at close on Friday, which stands below the net current asset value per share of $6.77 as of the June 2021 quarter.
GuruFocus assigned a score of 9 out of 10 to the company's financial strength and 1 out of 10 to its profitability.
Following a 17.74% drop that happened over the past year, the stock now has a market capitalization of $92.99 million and a 52-week range of $5.90 to $27.32.
Cormorant Asset Management, LLC is leading the group of the company's top fund holders with 9.89% of shares outstanding. The investment company is followed by FMR LLC with 9.43% and Logos Global Management LP with 9.36%.
On Wall Street, sell-side analysts recommend a median rating of buy and an average price target of $32.60 per share for the stock.
ReWalk Robotics Ltd
The second stock short-term investors may want to consider is ReWalk Robotics Ltd (RWLK, Financial), a Yokneam Illit, Israel-based medical device developer of wearable robotic exoskeletons for individuals with mobility impairments or other medical conditions in Israel, the United States and internationally.
The stock was trading at a price of $1.25 per share at close on Friday, standing below the net current asset value per share of $1.38 as of the June 2021 quarter.
GuruFocus assigned a score of 7 out of 10 to the company's financial strength and 1 out of 10 to its profitability.
After a 10.62% increase that occurred over the past year, the stock now has a market capitalization of $58.01 million and a 52-week range of $0.97 to $6.
ARMISTICE CAPITAL, LLC is the leader amid the company's top fund holders with 4.14% of shares outstanding, followed by SABBY MANAGEMENT, LLC with 2.95% and MORGAN STANLEY with 2.33%.
One sell-side analyst on Wall Street recommends a median rating of buy for this stock with a target price of $3.50 per share.
Disclosure: I have no positions in any securities mentioned.