Analysts Recommend Catching These 2 Falling Knives
Wall Street sell-side analysts have released positive recommendation ratings for Amarin Corp PLC (NASDAQ:AMRN) and Super League Gaming Inc (NASDAQ:SLGG), even though these two holdings have fallen more than 59% over the past 52 weeks, earning the name of "falling knives."
Some investors buy shares of falling knives because they predict they will bounce back so strongly, delivering impressive margin returns.
The sharp decline in the share price could be a signal of permanent financial problems, so investors should limit the investment risk by selecting falling knives with low debt burdens.
Amarin Corp PLC
Shares of the Irish biotech developer of treatments for cardiovascular disease patients traded at a price of $6.74 per unit at close on Tuesday after the share price fell by 69.5% over the prior 52 weeks.
The stock has a market capitalization of $2.6 billion, a 52-week range of $3.95 to $26.12 and a 14-day relative strength index of 44, which indicates the share price has not reached oversold levels.
GuruFocus assigned a positive rating of 6 out of 10 for the company's financial strength driven by a low debt-equity ratio of 0.08, a safe Altman Z-Score of 3.58 and a Piotroski F-Score of 7 out of 9, indicating a healthy financial situation.
As of July, the stock has two strong buy recommendation ratings and three buy recommendation ratings on Wall Street. Wall Street sell-side analysts have established a target price of 16.80 Euros ($18.97), which reflects a 181.5% upside from Tuesday's closing price.
Super League Gaming Inc
Shares of the Santa Monica, California-based owner and operator of a platform for electronic gaming and other multimedia activities traded at a price of $2.46 per unit at close on Tuesday as a result of a 69.3% decline over the prior 52 weeks.
The stock has a market capitalization of $25.65 million, a 52-week range of $1.30 to $9.29 and a 14-day relative strength index of 43, which indicates that this stock is still trading far from oversold levels.
GuruFocus assigned a positive score of 6 out of 10 for the financial strength of the company, which has no debt according to the financial statement from the most recent quarter.
The stock has one buy recommendation rating, two buy recommendation ratings and one hold recommendation rating on Wall Street.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.
