5 Cash-Rich Small Cap Stocks To Invest In

In this article, we will take a look at the 5 cash-rich small cap stocks to invest in. To see more such companies, go directly to 12 Cash-Rich Small Cap Stocks To Invest In.

5. Cogent Biosciences, Inc. (NASDAQ:COGT)

Number of Hedge Fund Holders: 29 

Cogent Biosciences, Inc. (NASDAQ:COGT) is a biotechnology company focused on developing novel precision therapies to treat a broad range of patients with unmet medical needs.

Needham analyst Ami Fadia initiated coverage of Cogent Biosciences with a Buy rating and $24 price target on December 14. According to the analyst, there is opportunity in systemic mastocytosis for a drug with an improved profile in both AdvSM and non-AdvSM. The analyst thinks bezu can have a differentiated profile versus existing treatments in SM with its superior selectivity against off-target kinases and minimal brain penetration, and in AdvSM, bezu can have similar efficacy with better safety than Blueprint’s (BPMC) Ayvakit.

29 of the 920 elite funds tracked by Insider Monkey reported holding stakes in Cogent Biosciences, Inc. (NASDAQ:COGT), with aggregate stakes worth approximately $474.8 million.

4. Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX)

Number of Hedge Fund Holders: 30

Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) is a publicly traded American company that provides physician practices, hospitals, and other healthcare providers with practice management and electronic health record technology. The company expects its fiscal year 2023 revenue to be between $640 million and $660 million, while its non-GAAP earnings per share is expected between around $0.90 and $1.00.

Earlier this December, Argus analyst David Coleman upgraded Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) to Buy from Hold with a $26 price target. According to the analyst, Allscripts’ cloud-based solutions have helped to meet the changing needs of patients and healthcare providers during the pandemic, and its increasing margins should continue to benefit from its fast-growing Veradigm business. He also believes that the company’s shares appear to be “attractively valued” at current prices.

According to Insider Monkey’s data, 30 hedge funds were long Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) at the end of Q3 2022, and Ken Fisher’s Fisher Asset Management held a prominent stake in the company, comprising 5.38 million shares worth approximately $82 million.

3. Magnachip Semiconductor Corporation (NSYE:MX)

Number of Hedge Fund Holders: 31

MagnaChip Semiconductor Corporation (NYSE:MX) is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, industrial and automotive applications. The company’s EPS estimate for the entirety of 2022 was positive and analysts expect it to remain positive (and significantly higher at $0.36) for the entirety of 2023 as well.

During the third quarter, Magnachip Semiconductor Corporation (NSYE:MX)’s adjusted EPS came in at $0.02, beating estimates by $0.08. For the fourth quarter, Magnachip Semiconductor Corporation (NSYE:MX) said it expects revenue to come in between $57 million to $62 million, versus the consensus estimate of $78.77 million.

At the end of Q3, 31 hedge funds in Insider Monkey’s database had a position in Magnachip Semiconductor Corporation (NYSE:MX). This is compared to 27 funds in the preceding quarter.

Here is what Altron Capital Management has to say about Magnachip Semiconductor Corporation (NYSE:MX) in its Q4 2021 investor letter:

“MagnaChip Semiconductor Corp. (NYSE:MX). While the previous buyout offer from Wise Road Capital did not go through as many expected, the company is still in talks with other potential buyers. Furthermore, the company announced a USD 75 million share buyback, which represents a significant percentage of the company’s shares. While we do not generally enter positions with the anticipation of a buyout, it is the case that a MagnaChip acquisition will be the most likely outcome.”

2. Merus N.V. (NASDAQ:MRUS)

Number of Hedge Fund Holders: 31

Merus N.V. (NASDAQ:MRUS) operates as a clinical-stage immuno-oncology company that focuses on developing bispecific antibody therapeutics alongside therapeutics to treat and cure cancer patients.

On January 4, EF Hutton analyst Tony Butler initiated coverage of Merus N.V. (NASDAQ:MRUS) with a Buy rating and $35 price target. According to the analyst, the company’s bispecific anticancer antibodies arising from its Biclonics platform are selected because of the functional ability of the antibody to eradicate tumor cells. To date, four antibodies borne from the Merus platform have elicited anticancer responses in a number of indications.

As of the end of the third quarter, 31 hedge funds tracked by Insider Monkey reported having stakes in Merus N.V. (NASDAQ:MRUS). The total value of these stakes was $346 million. Mark Lampert’s Biotechnology Value Fund / BVF Inc, which had a $69 million stake in Merus N.V. (NASDAQ:MRUS) at the end of September, was the company’s biggest shareholder.

1. Algoma Steel Group Inc. (NASDAQ:ASTL)

Number of Hedge Fund Holders: 39

Algoma Steel Group Inc. (NASDAQ:ASTL) is a fully integrated steel producer based in Sault Ste. Marie, Ontario, Canada, that manufactures and sells hot and cold rolled steel products including sheet and plate for the transportation industry. On November 29, Algoma Steel Group Inc. (NASDAQ:ASTL) declared a $0.05 per share quarterly dividend, in line with previous. The dividend was paid on December 30, to shareholders of record on November 30.

On January 18, Stifel analyst Ian Gillies upgraded Algoma Steel Group Inc. (NASDAQ:ASTL) to Buy from Hold with a price target of $15.00, up from $10.75. The upgrade is based on a near-term improvement in financial performance through an increase in volumes and higher unit pricing and the long-term value creation potential from the transition to an electric arc furnace which will better align the company’s cost structure and allow for higher production.

According to Insider Monkey’s Q3 database, 39 hedge funds were long Algoma Steel Group Inc. (NASDAQ:ASTL), compared to 45 funds in the prior quarter. Jon Bauer’s Contrarian Capital is the largest stakeholder of the company, with 7.50 million shares worth $48.30 million.

Here is what Nordstern Capital has to say about Algoma Steel Group Inc. (NASDAQ:ASTL) in its Q3 2022 investor letter:

“The world is short on raw materials and energy. Nordstern Capital has increased its exposure to raw materials and energy. Recession fears may temporarily suppress demand and prices. The fundamental issue, however, is a sustainable lack of supply, caused by decade-long underinvestment. The shortages cannot be resolved in the short to medium term.

Currently suppressed stock prices offer a wonderful opportunity for our commodity businesses to buy back their own shares. For instance, Algoma Steel Group (NASDAQ:ASTL) reduced its diluted share count this year from 177 million to 111 million. Nonetheless, ASTL’s share price has come down 50%, because US HRC steel prices per ton declined in the past year from $2,000 to currently $713. Today, ASTL has $500m in net cash and a market capitalization of about $700m. The company is profitable even in the current recessionary environment. The CFO expects annual mid-cycle free cash flow generation greater than the current ASTL enterprise value. This is one illustrative example. ASTL is not alone. Many present-day commodity businesses are cash and earnings rich and can use weak stock prices for aggressive buybacks.”

You can also take a peek at 15 Largest Plastic Manufacturing Companies in the World and 14 Countries Where Official Language is English.