Strong Stock Sees Success in a Growing Sector; Special Report by Leading Financial Web Site Penny Stock Detectives
In a recent Penny Stock Detectives article, editor Sasha Cekerevac argues that when looking at the agricultural commodities sector.
(prHWY.com) July 23, 2012 - New York, NY -- In a recent Penny Stock Detectives article, editor Sasha Cekerevac argues that when looking at the agricultural commodities sector, the amount of farmland is limited; therefore, gaining an average yield is important to increase corporate earnings. Cekerevac notes that one of the more interesting stocks when it comes to agricultural commodities is Yongye International, Inc.
"This firm is one of a few in the agricultural commodities sector that develops and sells liquid and powder compounds used in addition to traditional fertilizers," notes Cekerevac. "The compound consists of fulvic acid, which is then mixed with further nutrients that help the development of plants."
"The company is a Chinese-based firm, which can be viewed as positive," Cekerevac continues, noting, "China has a large population with limited farmland. This means that increasing yield for all agricultural commodities is extremely important."
In China, the company produces 46,000 tons per year of its product, with the cooperation of over 810 distributors and over 30,000 retailers in over 30 provinces, Cekerevac reports.
For the first quarter, which ended March 31, 2012, the company reported revenue of $64.4 million, up 20.2% from the prior year's first quarter. Corporate earnings at $21.9 million were up a staggering 95.0% from the first quarter of 2011, according to Cekerevac.
"The firm expects to continue increasing corporate earnings as it develops its retail network throughout China. It recently launched two new products and expects corporate earnings to remain strong throughout the rest of the year as more people become aware of the company," comments Cekerevac.
As agricultural commodities continue to be in demand, corporate earnings will be made from companies that can develop products that are unique and can meet the market demands, Cekerevac believes.
He reports that Yongye International trades at a minuscule price-to-earnings ratio of only 1.55, profit margins of almost 23.0%, and operating margins of over 28.0%. In his opinion, with the return of equity in excess of 30.0%, management appears quite adequate at running the company and can generate strong corporate earnings.
"As citizens around the world continue to grow wealthier and the population grows, agricultural commodities should continue to do well. Satisfying the need for farmers should help propel corporate earnings for firms like Yongye International," predicts the Penny Stock Detectives editor.
Cekerevac suggests investors wait for further corporate earnings reports before buying shares to determine if growth is sustainable and new products are meeting market demands.
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