Amira Nature Foods Ltd (NASDAQ: ANFI)
Amira Nature Foods Ltd (ANFI), a company that is a global provider of branded packaged Indian specialty rice is up 10% in pre market trading on Thursday. ANFI has reported in their 8-K filing that they have entered into a $92 million contract to supply basmati rice to a key repeat customer in the European, Middle Eastern, and African regions. The past few months ANFI has been in litigation against fraud complaints that they were inflating their revenue numbers. The complaints came from Prescience Point which released two short sell reports on the company causing the stock to fall over 80%. A third party forensic investigation has cleared ANFI of the accusation of inflating their revenues. Prescience Point has offered no rebuttal to the forensic report in over 2 months leading many to believe their claims were unfounded. ANFI stock has rebounded nicely in the past several months as many short sellers have covered their positions. I believe that the stock is still undervalued at these levels and would be a buyer, looking for a move to $15 in the coming months.
ANFI Technical Analysis
ANFI gapped up in price on Thursday to $9.50, up from the prior day’s close of $8.80, which is an 8% increase on favorable news. Taking a look at the daily chart, we can see the last time ANFI traded above this price level was on December 1st when it traded at $9.86. Taking a further look down the daily chart we can see that back on July 20th ANFI was trading at $14.15. A month later ANFI tanked all the way down to its 52 week low price of $2.51, equivalent to an 82% drop in price. This drop can be contributed to Prescience Point releasing two short sell reports against the company. Since that big drop ANFI has rebounded in price reaching highs of $10.60 on November 27th. As we can see the stock has been very volatile the last few months of trading. ANFI does have a low float of 16.21 million shares and is trading below the normal daily trading volume. ANFI did reach pre market highs of $9.75, but gave back $0.25 at the open, equivalent to 3%. For trading purposes, my entry point would have been $9.60 looking for a run to $10. My stop loss would have been $9.40, fearing anything below that and the stock would start to fill in the gap up.
Company Profile
Amira Nature Foods Ltd. (ANFI), incorporated on February 20, 2012, is a provider of packaged Indian specialty rice and other related rice based products. The Company’s products include snacks, ready-to-heat meals, organic product offerings, wheat, barley and legumes. ANFI sells Basmati rice, a long-grain variety of rice grown only in certain regions of the Indian sub-continent, under the brand name Amira. Amira branded products are sold in more than 40 countries by global retailers such as Bharti, Big Bazaar, Carrefour, Costco, easyday, Jetro Restaurant Depot, Lulu’s, Metro Cash & Carry, Morrison’s, Panda, Smart & Final, Spencer’s and Tesco. In emerging markets, its products are sold by global retailers and regional supermarkets such as the modern trade and privately-owned independent stores. The Company’s Indian business consists of sales under the Amira brand name through over 200 distributors that sell products to both traditional and modern retailers, as well as foodservice customers. Its international business consists of the sale of Amira branded, third party branded and institutional products in more than 60 countries. ANFI accesses these international markets through a combination of regional offices, in-country distribution and global retailer relationships, and consists of sales to both developed and emerging markets. The Company operates a fully-automated and integrated processing and milling facility that is strategically located in the vicinity of the key Basmati rice paddy producing regions of northern India. The facility spans a covered area of approximately 310,000 square feet, with a processing capacity of approximately 24 metric tons of paddy per hour. ANFI sells its products to Asia Pacific, Europe, Middle East, North Africa and North American regions. Reuters
