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Firms worth more than their stock provide investors with opportunity

Unusually large numbers of cash-rich firms are worth more than the net value of their stock and debt, new analysis suggests.According to data compiled by Bloomberg, a total of 2,267 companies around the world are in this position.Recent sharp declines on the stock market - with credit crunch-hit equities indices losing around 50 per cent of value over the past year - have boosted this number.The recent trend of stockpiling large amounts of cash as a protection against the credit crunch has also contributed to the trend - with the number of firms in this position eight times higher than the last bear market.Buying opportunities for investors looking for cheap shares have also emerged, with many firms seemingly drastically undervalued by the market.Speaking to Bloomberg, New York-based fund manager Jean-Marie Eveillard said: "Cash is king, not necessarily for the investor but for corporations."It's useful to sit on a ton of cash, number one to survive, as opposed to going bankrupt, and number two to seize opportunities either to make acquisitions cheaply or to squeeze competitors."James Paulsen at Wells Capital Management added: "When [investor] greed overcomes fear again, value is going to wag the dog."

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