Nanjing, China-based fashion company Ever-Glory International (NASDAQ:EVK) has its primary focus on “middle-to-high end casual wear, outerwear, and sportswear brands.” The target demographic, for the most part, appears to be young women. Outside of Asia, it’s likely that not too many investors are very familiar with EVK stock.
That’s not necessarily a bad thing as it leaves open the possibility of discovering a hidden gem. I always relish the opportunity to help my readers seize an investment opportunity that few other people are talking about.
Ever-Glory International’s shares have been tradable for a number of years, though the American financial community didn’t talk about EVK stock very much. The company listed its shares in the U.S. on the former American Stock Exchange in 2008, but then switched over to the Nasdaq in late 2014.
Interestingly, though, EVK stock received a whole lot of attention in October of this year due to its sudden price move. Now that more eyes are on Ever-Glory International, let’s see what value this company has to offer its shareholders.
EVK Stock at a Glance
Highly affordable EVK stock can be owned for less than $5 per share. This would qualify it as a penny stock according to the definition provided by the U.S. Securities and Exchange Commission (SEC).
With the onset of the novel coronavirus, EVK stock holders struggled as the share price tumbled to its 52-week low of 61 cents earlier this year. This was undoubtedly heart-wrenching as EVK typically traded above $1 prior to the pandemic.
However, EVK did manage to get back above $1. Then the share price mostly went sideways for several months. There was a big October surprise waiting, though.
Specifically, on Oct. 22, EVK stock rocketed up to its 52-week high of $6.76. Unfortunately, by the end of that trading day, it retraced back to the $2.55 area.
There was no particular news to accompany this unusual price move. One possible explanation is that one or more large-scale stockholders may have made a series of “block trades” involving millions of shares. Low-priced stocks can make huge moves when this happens.
Casting a Wide Net
It takes an open mind to invest in a less familiar, far-away company. Yet, just because a company isn’t well-known in your back yard, doesn’t mean that it’s not a juggernaut of a company.
Ever-Glory International’s brands include La go go, Velwin, Sea To Sky and Idole. These clothing brands are mainly focused on women.
Impressively, the company operates more than 1,038 retail locations in China. Moreover, Ever-Glory International doesn’t just provide those four clothing brands. The company also functions as a global apparel supply chain solution provider.
The company services practically the entire supply chain, including fabric development and design, sourcing, manufacturing, logistics, quality control and distribution.
Making the Most of a Tough Quarter
In other words, Ever-Glory International casts a wide net by covering so many different aspects of the Chinese apparel market. Thus, the company provides shareholder value because it offers diversification into many niches instead of depending on just one.
In a time when the retail apparel market has been impacted by Covid-19, Ever-Glory International’s size, brand-name recognition and diversified business model have undoubtedly helped the company weather the fiscal storm.
As we might expect, Ever-Glory International suffered a year-over-year decrease in second-quarter sales. Nonetheless, the company made noteworthy strides in reducing its expenses.
Furthermore, Ever-Glory International Chairman, President and CEO Yihua Kang looks forward to implementing improvements in other areas. “Going forward, we’ll implement a stricter client evaluation system and remain diligent in our account receivables collection,” explained Kang.
The Takeaway
Looking ahead, Ever-Glory International’s challenging second quarter could provide a setup for substantial improvement in multiple areas.
Perhaps you’ve never thought about entering into the multinational retail apparel business. Now, if you’re willing to take a chance on a less familiar company, EVK stock could provide you with exposure to remote regions and a diversified business framework.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system —with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.
