On Wall Street, the allure of high-growth small-cap stocks is undeniable. The potential for explosive returns can be a powerful motivator for investors seeking to outperform the market.
Massive conversions of convertible debt into equity most likely played a major role in the sharp decline in the stock price over the last 4 months. Should one look at the glass half full, though, a sizeable chunk of the debt maturing in 2025 was shed from the company's balance sheet in the process. The company is in discussions with interested parties regarding the sale of its Brazil business, which, if it materializes, would probably mean a hefty windfall of cash for the company.
The most oversold stocks in the consumer discretionary sector presents an opportunity to buy into undervalued companies.