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Amira Nature Foods Ltd (NYSE: ANFI) On The Comeback Trail

Amira Nature Foods Ltd (NYSE: ANFI) On The Comeback Trail
Written by
Alex Carlson
Published on
March 25, 2019
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Shares of Amira Nature Foods Ltd (NYSE: ANFI) have been steadily climbing ever since the stock bottomed out in December at $0.30 a share. Now ANFI is approaching and bumping up against strong resistance at the $2 mark. Traders are now asking if the stock can keep its momentum and the bulls continue pushing ANFI higher. ANFI Daily ChartAmira Nature Foods BackgroundFirst up, a little background info for those that are not familiar with the company. Founded in 1915, Amira has evolved into a global provider of packaged specialty rice, with sales in over 40 countries today. Amira sells Basmati rice, premium long-grain rice grown only in certain regions of the Indian sub-continent, under their flagship Amira brand as well as under other third-party brands. Amira sells its products primarily in emerging markets through a broad distribution network. Amira’s headquarters are in Dubai, United Arab Emirates, and it also has offices in India, Germany, the United Kingdom, and the United States.$30 million contractThe news that got the stock moving higher in December was a $30 million contract, to supply third-party branded basmati rice to a repeat customer in Europe, Middle East, and Africa (“EMEA”) region. The Company expects to recognize the benefit of this contract in fiscal 2020 ending March 31, 2020. Chairman Karan A. Chanana said:

“We are extremely pleased to continue our relationships with our customers in the EMEA region."

German expansionLast month, Amira Nature Foods announced that its rice bran oil product will now be sold through the Dohle Group which operates 102 hypermarkets branded "Hit," located mainly in the west of Germany, as well as 10 supermarkets in the Munich region. Thomas Dennhardt, CEO of the Company’s German Subsidiary, Amira Basmati Rice GmbH, said:

“We are excited to begin this new relationship with the Dohle Group and further expand our retail distribution network in Germany. Hit is known for its high-quality hypermarket stores and commitment to the communities it serves, and we are proud to partner with them to provide their customers with our high-quality flagship German Brand Atry Rice Bran Oil.”

Rice bran oil is the oil extracted from the hard outer brown layer of rice called chaff (rice husk) and contains a higher percentage of vitamin E than olive oil. Rice bran oil is also rich in oryzanol, which blocks cholesterol absorption and helps lower LDL cholesterol levels and isn’t present in olive oil. Initially, the Company will launch 1 SKU, Atry Rice Oil (500ml), that will be available at all 89 company owned Hit locations in Germany, with potential to expand the rollout of rice bran oil in America as well.Promo emailsWhile this news was helpful for the stock, it was really a series of promotional emails that really got the stock moving when they hit subscribers email boxes at the end of December and kept coming until earlier this month. One of the emails said:Just 2 months ago, in October, ANFI was trading around 1.50. That is almost 5x Monday’s close.Either ANFI is a drastically worse business or this could be attributed to the overall generally negative market sentiment that has taken down all ships for no good reason.If there is nothing specifically wrong with ANFI then this makes us wonder.Could this be the most undervalued company trading below $1 right now?What makes this opportunity unique is that ANFI is “a leading global provider” of branded packaged food products.Another promo email said:Wall Street analysts covering ANFI are projecting a $6.00 price target.According to analysts polled by Thomson Reuters, ANFI has potential 1,328% upside from its current price!We are urging all of our subscribers to add ANFI to the top of their watch list right now, and be ready Wednesday morning at or before the opening bell!Bottom lineCurrently trading with a market cap of $60 million, ANFI has been on a bull run since December. At this point for those that got in early, it might be wise to take some money off the table. For those that missed the rally, the $1 area offers strong support.We will be updating our subscribers as soon as we know more. For the latest updates in ANFI, sign up below!Disclosure: We have no position in ANFI and have not been compensated for this article.Photo by Pille Kirsi from Pexels

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