NEW YORK ( TheStreet) -- China agriculture stocks, AgFeed Industries (FEED), Origin Agritech (SEED - Get Report), American Dairy (ADY) and China Green Agriculture (CGA - Get Report) 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.