If you are looking for a safe stock, a company that has no debt and has shares trading below the cash per share, you can't get a better deal than that. It means that if the company goes out of business immediately and all assets are distributed to the investors, the investors would each receive more than the current price per share. You can't get a better safety floor than that.
Why would a stock sell for less than cash? There could be several reasons. The company may have recently announced terrible earnings which drove the stock pice down farther than it normally would have fallen. The stock may have been hit hard due to tax selling. Tax selling is when investors sell shares before year end that are currently at a huge loss, in order to get the tax benefits of generating a capital loss for the current year.
So are there really such companies who's stocks sell for less than cash? Yes, there are several. Here are a few examples.
Cyclacel Pharmaceuticals (CYCC) is a biopharmaceutical company developing mechanism targeted drugs to treat cancer. The company is debt free and $26.8 million in cash, amounting to $1.17 in cash per share, whereas the stock is trading for 70 cents per share. Revenues for the latest quarter were up 137.9%.
Delcath Systems (DCTH) is a specialty pharmaceutical and medical device company, which is debt free with $23 million in cash. The cash per share is $2.47 with a stock price of $1.35. Revenues for the latest quarter were up ober 201%.
Deswell Industries (DSWL) makes injection molded plastic parts and electronic products. The stock has over $40 million in cash with no debt. Cash per shares is $2.51 with a stock price of $1.89.
Hopefully one of the debt free stocks with lots of cash will make you debt free with lots of cash.
Disclosure: Author didn't own any of the stocks at the time the article was written.