Kronos Bio, Inc.לונג
Margin of Safety
Crazy how irrational Mr. Market can be on his bad days.
Imagine being able to take a walk down to the money store and buy a bundle of cash for 40% off. Is that what's happening with Kronos stock? Lets break it down:
As of last quarter, their total assets were 182.98M and their total liabilities were 46.01M, leaving a book value of equity of 136.97M. Using today's market capitalization of 77.52M, this puts the company's Price-to-Book Ratio at just 0.57.
Now, let's aggressively assume that their property, plant, and equipment is actually worthless, and look at only their short-term (current) assets. Last quarter, their current assets were 158.36M. This alone covers all of their liabilities and still leaves 112.35M, far in excess of their current market cap.
A situation like this generally occurs in times of extreme negative sentiment, which often turns out to be the best time to buy.
Although the company is not yet EPS positive, a balance sheet like this is highly desirable.
Combine that with a new uptrend above a few key moving averages, and you have a recipe for what appears to be an attractive investment.
Imagine being able to take a walk down to the money store and buy a bundle of cash for 40% off. Is that what's happening with Kronos stock? Lets break it down:
As of last quarter, their total assets were 182.98M and their total liabilities were 46.01M, leaving a book value of equity of 136.97M. Using today's market capitalization of 77.52M, this puts the company's Price-to-Book Ratio at just 0.57.
Now, let's aggressively assume that their property, plant, and equipment is actually worthless, and look at only their short-term (current) assets. Last quarter, their current assets were 158.36M. This alone covers all of their liabilities and still leaves 112.35M, far in excess of their current market cap.
A situation like this generally occurs in times of extreme negative sentiment, which often turns out to be the best time to buy.
Although the company is not yet EPS positive, a balance sheet like this is highly desirable.
Combine that with a new uptrend above a few key moving averages, and you have a recipe for what appears to be an attractive investment.
כתב ויתור
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