There are some investors who purchase 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 reappraised 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 benefit from the distribution of the liquidation value, which will most likely be higher 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 want to consider the two companies listed below, as their stock prices are trading below their net current asset value per share (NCAVPS).
The first stock short-term investors may want to consider is InspireMD Inc (NSPR, Financial), a Tel Aviv, Israel-based medical device company focusing on the development and commercialization of proprietary stent technologies to treat vascular and coronary diseases in the Middle East and globally.
The stock was trading at a price of $4.34 per share at close on Friday, which stands below the net current asset value per share of $4.85 as of the June 2021 quarter.
Following a 6.55% drop that took place over the past year, the stock now has a market capitalization of $34.35 million and a 52-week range of $3.60 to $22.20.
On Wall Street, one sell-side analyst recommends a rating of buy and a price target of $16.50 per share for the stock.
The stock was trading at a price of $1.52 per share at close on Friday, standing below the net current asset value per share of $6.48 as of the June 2021 quarter.
Following a 23.4% increase that happened over the past year, the stock now has a market capitalization of $384.70 million and a 52-week range of $1.17 to $3.82.
ACADIAN ASSET MANAGEMENT LLC is the leader amid the company's top fund holders with 3.05% of shares outstanding, followed by Greenwoods Asset Management Ltd with 2.16% and STATE STREET CORP with 2.09%.
Sell-side analysts on Wall Street recommend a median rating of hold for this stock with an average target price of $12.11 per share.
Disclosure: I have no positions in any securities mentioned.