After declining more than 59% over the past year through April 26, the following falling knives may be appealing to investors who believe they can outperform the overall market over the next 52 weeks as a result of forecasted price targets and strong recommendation ratings.
Further, these companies have a GuruFocus financial strength rating of at least 5 out of 10, reducing the bankruptcy rate risk, which is not uncommon among falling knives.
Here are the results of my search.
NCS Multistage Holdings Inc. (NCSM, Financial) closed at $4.09 per share on Friday after a 78% decline over the past year through April 26, sending the price below the 200, 100 and 50-day simple moving average lines. The closing price on Friday was 4.1% off the 52-week low of $3.93 and 355% from the 52-week high of $18.6.
The Houston, Texas-based provider of equipment and services to oil & gas operators has a market capitalization of $190.9 million. The forward price-earnings ratio is 434.78 versus the industry median of 21.37, the price-book ratio is 1.14 versus the industry median of 1.19 and the price-sales ratio is 0.83 compared to the industry median of 1. The EV-Ebitda ratio is 4.9 versus the industry median of 11.92.
GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability and growth rating of 5 out of 10.
Wall Street issued an overweight recommendation rating with an average target price of $7.25, reflecting a 77.3% upside from the closing price on Friday.
The 14-day relative strength index of 30 suggests the stock is approaching oversold levels.
Shares of La Jolla Pharmaceutical Company (LJPC, Financial) closed at $7.63 on Friday for a market capitalization of approximately $206.59 million. The stock declined 74% over the last 52 weeks through April 26, sending the share price below the 200 and 100-day simple moving average lines though it is still on par with the 50-day simple moving average line. The 52-week range is $5.01 to $38.39.
Headquartered in California, the developer of therapeutics for life-threatening diseases has a price-book ratio of 6.91 versus the industry median of 4.1 and a price-sales ratio of 19.72.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability and growth rating of 3 out of 10.
Wall Street issued an overweight recommendation rating with an average target price of $20.5, reflecting 169% upside from Friday's closing price.
The 14-day relative strength index of 61 suggests the stock is still far from oversold levels.
Shares of Mersana Therapeutics Inc. (MRSN, Financial) closed at $4.69 on Friday for a market capitalization of $223.64 million. The stock has declined 72% over the past year through April 26.
The chart below shows the stock is trading near the 100 and 50-day simple moving average lines, but below the 200-day simple moving average line. The closing share price on Friday was 65% above the 52-week low of $2.85 and 410% below the 52-week high of $23.96.
The Cambridge, Massachusetts-based biotech company has a price-book ratio of 12.37 versus the industry median of 4.1 and a price-sales ratio of 10.2.
GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability and growth rating of 2 out of 10.
Wall Street issued an overweight recommendation rating with an average target price of $10.25 per share, which represents 119.1% growth from the closing price on Friday.
The 14-day relative strength index of 47 suggests the stock is neither oversold nor overbought.
Disclosure: I have no positions in any securities mentioned.
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