Not long ago, I featured Chinese brand developer SGOCO Group (NASDAQ:SGOC) as a company to watch. The bull thesis is still intact for SGOC stock, even though the price is lower now.
Actually, contrarian investors should view this as a positive development. After all, if you liked SGOCO Group when the share price was higher, then you should like it even more after the price has come down.
My message today is that SGOC stock is the real deal – it’s not just a meme stock. Granted, the Reddit traders could boost the share price again to new highs.
But at the end of the day, it’s important to invest in the company, not just the stock. And in the case of SGOCO Group, it’s good to know that the company is not only compliant with listing requirements, but also has value to offer the stakeholders.
SGOC Stock at a Glance
That being said, it’s not hard to see why some folks might label SGOC stock as a Reddit stock.
In 2020, there were times when the share price dipped below $1. There have been times when companies listed on the Nasdaq Exchange were issued warnings because their stocks fell below the $1 threshold.
Therefore, that $1 was make-or-break for SGOCO Group’s investors. But during 2021’s first half, the stock price started to ramp up and even reached $2.20 in early July.
Yet, that was nothing compared to what happened next. Amazingly, the buyers pushed SGOC stock up to a 52-week high of $29 on July 12.
Were r/WallStreetBets users involved? It would be difficult to prove or disprove this hypothesis.
If you’re interested in the potential for an upcoming short squeeze, you can monitor SGOC stock’s short volume ratio as that’s something which traders look for.
Either way, the bulls displayed their strength – and the possibility of another powerful rally is undeniable.
In any case, as of Aug. 5, the stock had declined to $7.74. So, if you didn’t chase the price near $29, then you can get in at a more favorable price point now.
Deficiency and Resolution
Since SGOC stock is above $1, that should help to assuage concerns that the company might fall out of compliance with the Nasdaq Exchange’s listing requirements.
There was another concern, though, back in May of this year. Unfortunately, SGOCO Group reported that the company had fallen out of compliance with Nasdaq Listing Rule 5250(c)(1).
Apparently, SGOCO Group had failed to file its Form 20-F annual report for 2020 in a timely manner.
It’s been reported that the company attributed the filing delay to difficulty in obtaining and compiling information.
Thankfully, SGOCO Group did eventually file its Form 20-F and regained compliance with Nasdaq’s listing standards on July 12.
Real Estate and More
So, what exactly are you getting when you take a stake in SGOCO Group?
Really, you’re getting exposure to an array of businesses in China.
Now, I know what you might be thinking. Chinese businesses are under pressure from regulators.
That’s a reasonable objection, but SGOCO Group’s subsidiary businesses haven’t been targets of the Chinese government.
Moreover, these business ventures are surprisingly diversified. For example, SGOCO Group maintains investments in two real estate properties and a 21-story building in Hong Kong.
The company also owns a virtual reality (VR) research and development company called Century Skyway Limited.
Hence, if you believe that the market for VR headsets and other gear could expand in the coming years, then SGOC stock might be worth investigating.
Along with all of that, SGOCO Group owns a subsidiary business called Giant Credit Limited, which provides mortgage loans to customers in Hong Kong.
That’s not even a complete list of the company’s business ventures. It’s unlikely that the Chinese government will outlaw any of these businesses, so an investment in SGOCO Group shouldn’t keep you up at night.
The Takeaway on SGOC Stock
Going forward, SGOCO Group’s compliance with Nasdaq’s listing standards shouldn’t be a concern.
And just as importantly, the company offers instant diversification to an intriguing array of China-focused business ventures.
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.
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