Amira Nature Foods Limited (NYSE:ANFI) Sellers Covered 4.25% of Their Shorts

The stock of Amira Nature Foods Limited (NYSE:ANFI) registered a decrease of 4.25% in short interest. ANFI’s total short interest was 2.35M shares in June as published by FINRA. It’s down 4.25% from 2.46M shares, reported previously. With 147,600 shares average volume, it will take short sellers 16 days to cover their ANFI’s short positions. The short interest to Amira Nature Foods Limited’s float is 25.49%. The stock closed at $7.08 during the last session. It is down 37.74% since November 10, 2015 and is up trending. It has outperformed by 37.92% the S&P500.

Amira Nature Foods Limited is a provider of branded packaged Indian specialty rice and other products. The company has a market cap of $255.16 million. The Firm sells its products primarily under the Amira brand name to retailers, as well as foodservice customers. It has a 4.86 P/E ratio. The Firm offers a portfolio of brands that includes various brands of oils, dairy products, snacks and ready-to-eat meals.

Continue Treading Carefully with Amira Nature Foods ( ANFI ) Stock

I took an overview of the company and came to the conclusion that while it looked like a relative bargain based on its trailing twelve months earnings, before committing capital to this investment, one should conduct their own thorough due diligence before making any investment as some red flags existed that needed to be answered before making a commitment to ownership of this company.

When that article got released back in February, it got thrashed by what I would dub the “fan boys” of Amira Nature Foods stock on various stock message boards and forums. That in it of itself should raise eyebrows of any prospective investor looking to commit their hard earned capital to this particular stock: when people lash out at you for asking legitimate questions about a business, that should make you wonder how much rationality is surrounding the stock of that business.

On February 25, 2016, Amira’s stock traded at $12.50. Fast forward a little over 2 months and the stock trades today at just under $7.00. If you had decided to commit your hard earned money to Amira’s stock back when this article was released, you would be staring at a 44% decline in your investment.

This is not to gloat about being right or wrong. I didn’t provide any predictions and projections of where I thought the stock was going back in February and I won’t be predicting anything today. What I did advise was that a potential investor should tread carefully as there were – and still are – a plethora of issues surrounding the business that is Amira Nature Foods that need to be answered to one’s satisfaction in a thorough and rigorous fashion.

It is easy to get caught up in the excitement and potential of a seemingly promising sounding growth stock opportunity at low valuations. It gets even more dangerous when you actively start seeking out confirmation bias online in various stock forums and messaging boards on a particular stock you find so exciting.

A true investor conducts thorough due diligence on the company they are looking to invest in. You absolutely need to know accounting and possess financial and mathematical literacy. If there are accounting red flags that pop up, you need to be able to understand if they are serious or not. You need to be able to gauge whether management has integrity and an eye towards shareholders. The right company should be able to withstand the skeptical scrutiny that you put it through.

With all of that said, the primary reason Amira’s stock has fallen so badly has to do with the fall in the commodity price of Basmati Rice. Along with a decrease in international revenue, revenue has fallen by 17.3%. One of the factors a potential investor has to be aware of when analyzing a commodity-based company is the concept of peak earnings and value traps. While Amira’s seemingly low P/E ratio of 4.8 might seem enticing on a shallow glance, you need to be able to adjust this based on where in the commodity cycle the company is and relative to a full commodity cycle of average earnings.

What this humble author is attempting to get across to the reader is this: when you are looking to commit your hard earned cash into a potential business, you better understand that business inside and out or you will get burned badly. A business like Amira Nature Foods requires a deep knowledge of the basmati rice market, a working knowledge of accounting, and an ability to gauge the extent of shareholder friendliness of management. There are many questions you need to ask, and answer, before committing your capital.

Amira Nature Foods Ltd (ANFI) Breakout Inspires Accelerated Options Trading

Food stock Amira Nature Foods Ltd (NYSE:ANFI) has been all over the charts during the past 12 months. In mid-July, the shares shot to an annual high of $14.56, only to fall to an all-time low of $2.51 just a month later. More recently, ANFI jumped above $14 last month, but again slid precipitously following this near-term peak. This has resulted in a 14-day Relative Strength Index (RSI) of 28 -- meaning the stock has technically been oversold.

Today, the shares are on the way back up, rallying a remarkable 27.7% to $10.40 -- making it the leading gainer on the New York Stock Exchange -- thanks to news the company plans to release interim financials this month. ANFI is now back in the black on a year-to-date basis, which is good news for options traders.

Specifically, the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 11.91, putting it in the 78th percentile of its annual range -- albeit amid extremely light volume. So not only have almost 12 calls been bought to open for every put, but this reading also displays a greater-than-usual appetite for ANFI calls relative to puts.

However, ANFI is heavily shorted, with a short-interest ratio of 5.10. With this being the case, it's possible recent call buyers are short sellers trying to protect themselves from an unexpected surge in the shares -- like we're seeing today.

In late-afternoon trading, both calls and puts are crossing at twice the normal intraday pace. The most popular option is the May 10 put, and if traders are buying to open positions, they're betting on Amira Nature Foods Ltd (NYSE:ANFI) falling back into single digits by the close on Friday, May 20, when the back-month options expire. 

Amira Nature Foods Ltd Announces New Distribution Win with Cost Plus World Market Stores

Amira Nature Foods Ltd (NYSE: ANFI), a leading global provider of branded packaged Indian specialty rice, announced today that its Amira branded products will now be available in Cost Plus World Market stores across the United States.

Cost Plus World Market, a subsidiary of Bed Bath & Beyond Inc, sells a wide variety of goods that are imported from more than 50 countries around the world. Headquartered in Oakland, California, the chain operates more than 250 stores in over 30 states across the U.S. The nationwide retailer will carry two SKUs of Amira branded products in its stores: Amira Natural Brown Basmati Rice and Amira Smoked Basmati Rice.

“We are excited to expand our distribution in the United States with the addition of Cost Plus World Market stores,” said Karan A Chanana, Chairman of Amira Nature Foods Ltd. “We are working to expand the Amira brand across the country, and the addition of Cost Plus with its focus on goods from around the world and international food products is a perfect fit for our Amira branded rice products.”

AMIRA (NYSE: ANFI)

Amira Nature Foods Ltd (ANFI) Upgraded by Vetr Inc. to “Strong-Buy”

Vetr upgraded shares of Amira Nature Foods Ltd (NYSE:ANFI) from a buy rating to a strong-buy rating in a report released on Tuesday morning, Marketbeat.com reports. They currently have $13.57 target price on the stock.

A hedge fund recently bought a new stake in Amira Nature Foods stock. The Manufacturers Life Insurance Company acquired a new stake in shares of Amira Nature Foods Ltd (NYSE:ANFI) during the fourth quarter, according to its most recent disclosure with the SEC. The institutional investor acquired 236,686 shares of the company’s stock, valued at approximately $2,156,000. The Manufacturers Life Insurance Company owned 0.66% of Amira Nature Foods as of its most recent filing with the SEC.

Amira Nature Foods (NYSE:ANFI) opened at 10.65 on Tuesday. The company has a market cap of $382.68 million and a P/E ratio of 7.29. Amira Nature Foods has a 12 month low of $2.51 and a 12 month high of $14.56. The firm has a 50-day moving average price of $11.44 and a 200 day moving average price of $8.00.

Amira Nature Foods Ltd. (NYSE:ANFI) 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.

Tread Carefully with Amira Nature Foods (ANFI) Stock

Potential investors looking into Amira Nature Foods could be forgiven if they get unabashedly excited for prospective ownership in the company. The Indian food company, headquartered in Dubai, which is best known for processing and distributing Basmati Rice and other related food products, appears to be, at first glance, a real steal. It sells its products in over 60 countries and has been in existence in one form or another for a century.

The stock, currently trading around $12, can be had for just under 9 times annual profits, for a P/E ratio of 9. Not only that, since going public in 2012, the company has grown its revenue from $203 million to $700 million, and net profit from $5 million to $42 million. Gross margin, operating margin, and net profit margins have all been increasing since 2010. Financial leverage has come down from 6.6 times assets to 2.6 times assets by 2015. Return on Assets has improved from 2.4% to 9.2%. So has Return on Equity, going from 15.82% to 24.27%, and Return on Invested Capital, growing from 7.4% to 18.3%.

With analyst estimates of 25% growth over the next 5 years, it may seem that the current earnings per share of $1.46 could expand to $4.61 per share by 2020 if the high expected growth rate is achieved and maintained. If Amira grew its earnings per share to $4.61 in 5 years time, and the stock traded at the exact same earnings multiple of 9, you could potentially see your investment compound by north of 20% over the next 5 years.

While everything looks very promising, there are also some concerns. First, the most up to date financials are from March 2015. There is concerning because it has been almost a full calendar year since the financial health of the company has been reported. Even though the company reports with the SEC through a 20-F, it is still slightly concerning when you see that an Indian company is headquartered in Dubai and reports stale financials to the US. To add to this, the independent auditors they have hired to audit their financial statements, ASA & Associates LLP, is an Indian based auditing firm, not an established American auditing firm. It’s just that this long and winding trail should make you, as a critical analyst, weary.

I also find the cash flow statement concerning. While strong net profit growth is evident in the income statement, the cash flow statement tells a different story. Since financials have been reported from 2010, aside from 2012, operating cash flow has always been significantly lower than net income. This is concerning because if net income is much larger than operating cash flow, it’s a signal that the company’s earnings quality – the usefulness of earnings – is potentially questionable. If I were to seriously consider investment in Amira Nature Foods, I would want to understand why operating cash flow has been lagging net income so badly.

Prescience Point made allegations last year that Amira was cooking the books. While I have not gone through the 20-F filing in-depth to verify or confirm these allegations, I would think it would be prudent to go through the allegations and see for yourself if they are valid or not. For a stock such as Amira, I believe it would be prudent to approach potential ownership by conducting your own research with a critical eye.

You can trust, but always verify. If Amira’s financials check out to be solid, it could potentially be a very lucrative and attractive opportunity.

For More Information: http://www.modestmoney.com/tread-carefully-with-amira-nature-foods-anfi-stock/31566