Strive Asset Management: recent performance snapshot

Strive Asset Management (ASST) has caught investor attention after a recent run in the stock, with shares closing at US$18.21 and posting gains over the past week, month and past 3 months.

Those price moves sit alongside reported annual revenue of US$7.03m and a net loss of US$697.96m, within a business focused on providing portfolio management for investment companies and investing in exchange traded funds.

Short term momentum has been firm, with the stock showing a 7 day share price return of 8.46% and a 90 day share price return of 147.42%. However, the year to date share price return of 5.31% points to a more modest longer term picture.

If this kind of sharp move has you scanning for other potential opportunities, it could be worth widening your search to 20 top founder-led companies

With ASST trading at US$18.21, a market value of about US$1.33b, analyst targets sitting higher and the business still reporting a sizeable net loss, you have to ask: is this a genuine opportunity, or is the market already pricing in future growth?

Price to book of 1.9x: is it justified?

On a P/B of 1.9x, Strive Asset Management is priced below both the US Medical Equipment industry average of 2.4x and its peer average of 2.5x.

P/B compares the company’s market value with its net assets, which can be a useful reference when earnings are negative and profit based metrics are less helpful.

Given ASST is reporting a net loss and a return on equity decline of 63.33%, a lower P/B than industry and peer averages suggests the market is pricing in that weaker profitability alongside expectations for future improvement.

The discount versus both the sector and peers is clear, with ASST’s 1.9x P/B sitting well below the 2.4x industry level and 2.5x peer average, which indicates investors are currently paying less for each dollar of book value than they are for comparable Medical Equipment stocks.

Result: Price to book of 1.9x (ABOUT RIGHT)

However, there are clear risks here, including the reported net loss of US$697.96m and a relatively small revenue base of US$7.03m, which is supporting a US$1.33b valuation.

Next Steps

Mixed signals so far, right, with sharp price moves sitting against losses and a rich valuation, so act quickly and review the details for yourself. To see both sides of the story in one place, take a closer look at the 2 key rewards and 1 important warning sign.

Looking for more investment ideas?

If ASST has caught your eye, do not stop here. The market is full of other stocks that could better match your risk, income or growth goals.

• Target potential upside by scanning for companies trading below estimated value through the 49 high quality undervalued stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.