This stock is attractive because it is listed on the NASDAQ with operations in the vast market of China. Additionally, the business relates to the Forestry & Wood Products Industry of the Basic Materials Sector. Demand for all farm products are firm during the first quarter of 2008. No other part of the economy has such stable business prospects in the near term. This particular stock is close to its 52-week low as the second fortnight of 2008 begins to unfold. It is an optimal time to enter and hold the stock because of the structural strengths of the company.
There are three important strengths that make this stock stand out from alternatives in its industry segment. First, the company is focused on corn. About 75% of revenues come from this crop. Corn has a combination of grain and bio-fuel applications. It can also be processed for important industrial and food processing products. Long term stock investors will value hybrid corn seeds highly. This company is a segment leader of China in this respect.
The management has displayed nimble and adaptive capabilities to short term market conditions. It has been successful in liquidating inventories in time as corn seed stock piled up during the recent past. Such volatility is normal in the hybrid seed business. The company has ended the Most Recent Quarter with a Quick Ratio of 0.69 against a norm of 0.80 for the industry and 1.14 in the sector.
A third axis of strategic strength for the stock relates to its long term resources. The company has nine breeding stations in China. Its basket of some 100 products includes rice and canola brands. The management has earned industry recognition, which is borne out by the licensing arrangements it has secured. Such outsourced products add to stock value from proprietary brands.
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