Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Asta Receives Uplift

BySaj Karsan
Published 10/08/2012, 06:21 AM
Updated 07/09/2023, 06:31 AM

Just 15 months ago, shares of Asta Funding could be had for $6 and change. At that time, the stock was brought up on this site as a potential value investment. Since then, the shares are up some 50%, offering investors the opportunity to exit after a quick but monumental rise.

This was far from a perfect stock. Despite a large discount to book value, management appeared more intent on growing the company than generating shareholder returns. The focus was (is) on an acquisition, even though it was Asta's own shares that likely provided the best investment opportunity. Now that the price has run up, management has become more active with buybacks, in a glaring case of "too little, too late."

But the discount to book value was so large that an opportunity for investors was present despite the negatives. In addition, book value was likely understated.

Now, however, the stock trades a lot closer to book value, but the risks of a large acquisition remain. Investors may wish to deploy the capital gained from this investment into other Stock Ideas, or they may wish to cash out and lie in wait until such time as the market offers better opportunities.

Disclosure: No position.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.