Acorn International, Inc. (NYSE: ATV)
Acorn International, Inc. (ATV), a marketing and branding company based in China yesterday announced a share repurchase program to repurchase $2 million worth of American Depository Shares (ADS) in the next 12 months. Acorn plans to fund the repurchase program through their available cash balance. The company had a market cap of $16.7 million, making the repurchase program 12% of that cap. As of late afternoon trading on Monday the stock is up over 100%, and has it highs of $10.35, equivalent to a 158% increase in price. This shows that despite the crash in China and the weak economy investors are still willing to buy into Chinese growth stocks.
ATV Technical Analysis
ATV gapped up in price yesterday to $6.94, up from the prior day’s close of $4.01, which is a 73% increase in price. Taking a look at the daily chart, we can see the last time ATV traded above this price level was on December 14th when it traded at $7.87. As of late Monday afternoon trading stock is at $8.12 up over 102%. The 52 week high price is $20.85 so there is still room for this upswing to grow. ATV has a low float of 685.70 thousand shares and is trading almost 38 times the normal daily trading volume. This is the perfect example of the gap and go strategy, with such a low float it does not take much volume to really move this stock. ATV did reach highs of $10.35, but gave back $2.23 as of late afternoon trading, equivalent to 22%. For trading purposes, I would like to see the stock stay above $7 and use that as a possible support and buy level moving forward.
Company Profile
Acorn International Inc., incorporated on December 20, 2005, is a China-based marketing and branding company. The Company’s business consists of two main divisions: direct-sales platforms and the company’s distribution network. The Company’s direct-sales business involves marketing and selling products directly to consumers in China through various platforms, including its outbound marketing platform, Internet sales and catalog sales. The Company offers over 1,800 products through its outbound marketing and online stores, as well as its distribution network. Through its outbound marketing platform, the Company operates call centers that directly market consumer products to individual customers in China. As of December 31, 2014, the Company’s database contained approximately 18.9 million names of individual customers. The Company operates call centers in Beijing and Wuxi, which process telephone orders generated by its direct-sales platforms. The Company conducts its Internet sales business both through its Website and on the platforms of e-commerce companies. In addition to its official Website, it maintained e-shops on various e-commerce platforms in China, including T-mall.com, Taobao, JD.com, and Amazon to provide products and services to its end-customers. The Company’s catalog sales are conducted through its catalogs, which are distributed with the products purchased and shipped to its customers. As of December 31, 2014, the Company sold over 1,100 kinds of products via its catalogs. In addition to its direct-sales platforms, the Company maintains a distribution network through which it distributes some of its products promoted by its direct-sales platforms, including its various product lines. The Company’s distribution network covers all provinces in China through more than 25 distributors, and reaches over 2,600 retail outlets across China. These retail outlets include bookstores, supermarkets, pharmacies, specialty retail chains and department stores. As of December 31, 2014, the Company featured products in the following categories and under the following brands: Electronic Learning Products featuring the Ozing branded electronic learning device incorporating mobile Internet interactive features, such as online tutoring services; Collectibles Products; Health Products featuring Babaka posture correction products; Kitchen and Household Products featuring Rose branded knives and True Sleeper household products, and Mobile Phone Products featuring Gionee and Konka branded mobile phones. The Company competes with BBG, Noah, Readboy, Dang Dang Wang and Yihaodian. Reuters
