NEW YORK (TheStreet) -- China agriculture stocks, AgFeed Industries (FEED), Origin Agritech (SEED), American Dairy (ADY) and China Green Agriculture (CGA) have all witnessed a significant build up in short interest and a sharp correction in stock prices since April.
AgFeed Industries is trading at 52-week lows of $3.30, while Origin Agritech has lost 22% in the last one month. American Dairy has lost 15% and China Green Agriculture has declined 21% in the last one month.
In comparison, both Shanghai composite index and S&P 500 index have lost 14% and 8%, respectively during the same
The recent quarterly results were not particularly strong, falling short of lofty analyst expectations. Nevertheless, we reckon these stocks have been oversold leading to an attractive buying opportunity .An attractive price-to-earnings ratio, possible short covering once these stocks start recovering on inexpensive valuations coupled with a continued bullish sentiment among analysts could lead to an upsurge in prices. The short interest build up on these stocks recently is rather amazing and is one of the highest across all U.S. listed China stocks. As a percentage of float, short interest for AgFeed Industries, Origin Agritech, American Dairy and China Green Agriculture is 23.57%, 26.94%, 22.86% and 21.20%, respectively. AgFeed, American Dairy and China Green Agriculture are trading at attractive forward PEs of 13.3, 16.3 and 12.1, respectively.
Recent Quarterly PerformanceAgFeed Industries, a U.S. based food processing company with operations in China, reported a revenue growth of 58.1% to $52.9 million during the first quarter of 2010 driven by an expanding market share in its feed business and the production of its hog farm. However, the company's earnings came in below analyst estimates. The company reported earnings of 2 cents per share compared to consensus estimate of 11 cents per share. This is attributed to the fact that cost of goods sold increased 68.5% to $46.5 million, thereby contracting gross margin by 541 basis points to 11.95%.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV