Have you ever imagined that you would invest in a Chinese agricultural products company? Maybe not, but Closed (NASDAQ:FAMI) is worthy of your investment capital, because there is a hidden gem in the FAMI share.
Now I know what some of you are thinking. Chinese stocks are toxic, right?
After all, no one wants to invest in the next one Evergrande (OTCMKTS:EGRNF). crazy moneyJim Cramer even went so far as to say that “you should avoid” Chinese Initial Public Offerings (IPOs) “at all costs.”
With such warnings, it’s no surprise that some people feel reluctant to invest in FAMI stocks.
Still, I encourage you to be motivated instead of being afraid. Unlike Evergrade, Farmmi is poised for rapid growth and deserves consideration rather than condemnation.
A closer look at FAMI Stock
It’s hard to know for sure, but FAMI’s stock may have been the target of a Reddit-presser short powered.
The action started in 2021 at $ 1.14, but suddenly catapulted to $ 2.47 in February. There was no company-specific information catalyst to justify such a rapid doubling in the share price. In addition, the FAMI stock had the hallmarks of a Reddit focus: low stock price, relatively low trading volume (before the rally), and the fact that it was not a stock. first class.
Either way, the rally obviously didn’t last long. Painfully, the Farmmi share price slumped below $ 1 in April and even fell below 25 cents in September. In early November, FAMI stock was trading at around 32 cents.
If you like to buy stocks during peaks of pessimism, this should be a great opportunity.
Additionally, Farmmi’s last 12 month price-to-earnings ratio is ridiculously low at 2.54.
So it’s not as if Farmmi doesn’t have any income. Wall Street just doesn’t seem to like the company and the stocks right now, but that could change as the investment community is fickle.
A fancy mushroom supplier
You could say that Farmmi is the go-to supplier in China of what I call “fancy mushrooms” – that is, shiitake mushrooms and similar foods.
Now, as Evergrande loses customers as well as people’s trust, Farmmi is busy racking up orders like there is no tomorrow. I have already listed eight important purchase orders in a previous article. These orders came from several regions of the world, including the United States, Canada and Lebanon.
In addition, Farmmi, through its subsidiary Zhejiang Farmmi Biotechnology, has just won a new multi-product order for dried black mushrooms and whole dried mushrooms. The release says the customer will then export the products to Vancouver, Canada. Farmmi President and CEO Yefang Zhang marked the occasion with optimism about her company’s international progress.
“We are delighted with the continued momentum we are seeing in our target international growth markets, including Canada, the United States and Europe,” said Zhang.
Diversify the business
However, don’t get the impression that Farmmi’s business model is all about selling mushroom products.
Indeed, you might be pleasantly surprised to learn that Farmmi is branching out into healthcare. With this in mind, Farmmi has agreed to purchase around 16% of Shanghai Jiaoda only. This company is one of the largest Chinese elderly care and rehabilitation institutions. Currently, Jiaoda Only operates 14 care and rehabilitation facilities, with a capacity of almost 4,000 beds.
Impressively, Jiaoda Only generated nearly 333 million yuan (approximately US $ 52.1 million) in fiscal year 2020. Equally impressive is that Jiaoda Only’s health food business has 31 numbers. of health food approval and 16 invention patents. These cover a range of products including: dietary supplements, traditional tonics, products for heart protection and hypoglycemic conditions and more.
The result on FAMI Stock
I hope I have proven today that Farmmi is far from the next Evergrande.
Rather, it should be the next Wall Street star.
Farmmi’s valuation is ultra-low and the company is expanding into a number of high potential markets.
So there is no need to let fear discourage you. FAMI stock is cheap now and should be reassessed very soon.
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At the date of publication, David Moadel did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
David Moadel provided compelling content – and sometimes crossed the line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga and (of course) InvestorPlace.com. He is also a chief analyst and market researcher for Portfolio Wealth Global and hosts the popular YouTube financial channel Looking at the Markets.