Falling Knives are companies whose share prices have fallen more than 59% over the past year, generating the interest of investors as they can make huge gains if they bounce back.
It is also true that such deep depreciation could signal the companies are having serious financial issues, implying a remarkable risk of loss, which can, however, be significantly reduced if investors pick falling knives with moderate-to-low debt-equity ratios.
In addition to the moderate-to-low financial burden, the following securities have received positive recommendation ratings ranging between hold and buy from sell-side analysts on Wall Street, increasing the likelihood they will recover.
Here are some results from my search.
Shares of NuCana PLC (NASDAQ:NCNA) closed at $7 on Friday for a market capitalization of $224.04 million. The stock declined 72.2% over the last 52 weeks through Aug. 16.
Based in the United Kingdom, NuCana is a clinical-stage biopharmaceutical company focusing on the development of cancer treatments. The stock has a debt-to-equity ratio of 0.01 versus the industry median of 0.22.
Further, GuruFocus assigned a positive financial strength rating of 6.2 out of 10, but a very low profitability and growth rating of 2 out of 10.
The stock is trading below the 200-, 100- and 50-day simple moving average lines. The 52-week range is $6.80 to $30.10.
The price-book ratio is 2.23 versus the industry median of 3.1.
The 14-day relative strength index of 26 suggests the stock is oversold.
Analysts issued a buy recommendation rating with an average target price of $33.
Shares of GlycoMimetics Inc. (NASDAQ:GLYC) closed at $3.4 per share on Friday for a market capitalization of $146.86 million. The stock declined 78% over the past 52 weeks through Aug. 16.
Headquartered in Rockville, Maryland, GlycoMimetics is a clinical-stage biotechnology company focusing on the development of new glycomimetic drugs. These medications are designed to address unmet medical needs in the U.S.
The stock has a debt-equity ratio of 0.02 versus the industry median of 0.22.
GuruFocus assigned a high financial strength rating of 7 out of 10, but a low profitability and growth rating of 3 out of 10.
The share price is below the 200-, 100- and 50-day simple moving average lines. The 52-week range was $2.64 to $16.35.
The price-book ratio is 0.83 versus the industry median of 3.1.
The 14-day relative strength index of 21 suggests the stock is oversold.
Analysts issued an overweight recommendation rating with an average target price of $9.8.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.