FEED back on the radar as i alerted this stock the other week though made a false breakout but mentioned to keep this as watch as it shouldn’t be counted out. FEED made a strong move today with increased volume on news of strong earnings and re-affirming 08′ guidance. This is an excellent breakout that i believe should at least be able to rake in 10% more gain from todays close as the chart in conjunction with a solid earnings report should help sustain the momentum here.
[i]
Results, Growth in Net Income of More Than 450%, Affirms 2008 Financial Guidance
Wednesday March 12, 6:00 am ET
SHANGHAI, CHINA–(MARKET WIRE)–Mar 12, 2008 — AgFeed Industries, Inc. (NasdaqGM:FEED - News), a market leader in China’s premix animal nutrition and hog raising industry, today announced record sales and earnings for 2007, primarily from the production and sale of premix animal feed products. AgFeed entered the hog production industry in November 2007 through the acquisition of a breeder hog farm. AgFeed sales in 2007 from hog production were not material.
The following are some of the key financial highlights of the Company for the fiscal year ended December 31, 2007.
FINANCIAL HIGHLIGHTS:
– Revenues grew 321% to approximately $36.16 million from $8.59 million
in 2006.
– Gross profit increased to $10.40 million from $3.15 million in 2006.
– Net income grew 467% to $6.66 million from $1.18 million in 2006.
– Earnings per share (basic) of $0.26, is an increase of 271% compared
to 2006.
– Earnings per share (fully diluted) of $0.25, represents an increase of
257% from 2006.
– Comprehensive income of $7.33 million increased by 482% compared to
2006.
– As of December 31, 2007, AgFeed had approximately $7.7 million in cash
with no long term debt.
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Songyan Li, Chairman of AgFeed, commented, “In early 2007, AgFeed projected record sales and earnings for fiscal year 2007. We have delivered such results. AgFeed is now the largest premix animal feed company in China in terms of sales in a highly fragmented industry. We anticipate our feed business will continue to grow at a significant rate in 2008. We also anticipate doubling our independently owned exclusive AgFeed product chain stores to 1,000 stores in 2008.”[/i]
Looking forward FEED expects 08 earnings to be around 1.03eps which gives FEED a fair value of around 19.77/share given that the food processing industry is currently trading at a 19.2x earnings multiple.
I hopped in today on the breakout at $12.
