Falling knives are companies whose share prices have declined more than 59% over the last 12 months. Some investors take positions in these companies because they believe the stocks will post impressive gains once they rebound.
Investors are also aware that a significant decrease in the share price could signal financial distress, so their portfolio could be hurt if the company goes bankrupt. If investors acquire shares of falling knives with moderate to low debt-to-equity ratios, they can significantly reduce the risk.
Here are some results from my search.
Shares of ImmunoGen Inc. (IMGN, Financial) closed at $2.3 on Wednesday for a market capitalization of nearly $347 million. The stock declined 78% over the last 12 months through July 3.
The Waltham, Massachusetts-based developer of antibody drug conjugate therapies for treating cancer has a debt-to-equity ratio of -1.04 versus the industry median of 0.25. Investors must, however, be careful with this stock as GuruFocus assigned a very low financial strength rating of 2.8 out of 10 and a low profitability and growth rating of 4 out of 10.
The closing price on Wednesday was below the 200-, 100- and 50-day simple moving average lines. The 52-week range was $1.76 to $11.43.
The price-sales ratio is 7.96 versus the industry median of 10.11.
The 14-day relative strength index of 56.02 suggests the stock is neither oversold nor overbought.
Wall Street issued an overweight recommendation rating with an average target price of $4.67. The rating means sell-side analysts anticipate the stock will top either the industry or the entire market within 52 weeks.
Shares of Comscore Inc. (SCOR, Financial) closed at $5.37 per share on Wednesday for a market capitalization of nearly $333.6 million. The stock declined 76% over the past 12 months through July 3.
The Reston, Virginia-based media measurement and analytics company, which provides information on audiences, consumer behavior and advertising collected across international media platforms, has a debt-equity ratio of 0.34. GuruFocus assigned a low financial strength rating of 4.3 out of 10. Therefore, investors must do thorough research on this company before buying shares. GuruFocus also assigned a very low profitability and growth rating of 2 out of 10.
Wednesday's closing share price was below the 200-, 100- and 50-day simple moving average lines. The 52-week range was $4.97 to $23.89.
The price-book ratio is 0.57 versus the industry median of 1.9 and the price-sales ratio is 0.72 versus the industry median of 1.06.
The 14-day relative strength index of 14 suggests the stock is oversold.
Wall Street issued an overweight recommendation rating with an average target price of $17.20.
Disclosure: I have no positions in any securities mentioned.
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