Today, investors in Ever-Glory International (NASDAQ:EVK) and EVK stock are seeing rather impressive gains. Indeed, any triple-digit day is incredible and is likely to have investors on watch.
Today, EVK stock is one I’ve added to my watch list on this news. This has been one of the most active stocks today, with trading volume exceeding the average daily volume by a wide margin. Currently, more than 125 million shares have traded hands, relative to an average daily volume of around a half million shares.
As expected, some big news is driving today’s rapid share-price appreciation. Let’s dive into what was announced and why it’s a big deal for Ever-Glory shareholders.
Share Repurchase Program Boosting EVK Stock
Today, Ever-Glory announced a share repurchase program of $5 million. Indeed, that’s small potatoes for most companies. However, given Ever-Glory’s market capitalization of less than $35 million as of yesterday, that’s a big announcement.
Any significant share repurchase program announcement is bullish news for a given company. Indeed, when a company buys back shares, it sends a strong signal to the market it thinks its shares are undervalued. For investors in EVK stock, that’s music to their ears.
Of course, there are a few other catalysts driving Ever-Glory higher in a big way today. Among these, I see two key catalysts as reasons for today’s increase.
First, Ever-Glory is an apparel retailer and supply-chain provider. This sector has been hit hard as a result of the pandemic. Accordingly, there’s a strong pandemic reopening thesis with this company.
Second, investors may be aware of the hit Chinese stocks have taken in recent weeks. Various regulatory concerns related to how the Chinese Communist Party (CCP) aims to regulate its corporations has led to increased risk premia being factored into such stocks. While tech stocks were hit the hardest, conventional retailers such as Ever-Glory have not been exempt. Indeed, shares of EVK stock had roughly halved from February’s peak, before today’s spike.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.