One of the leading agricultural supplies in China, Farmmi (NASDAQ:FAMI), has been a rather volatile option for investors of late. Indeed, today’s 7% move to the upside for FAMI stock suggests investors (finally) have something to cheer.
Indeed, Chinese-oriented stocks have been on quite the decline recently. Everything from regulatory crackdowns to supply chain concerns have made this emerging market a difficult one to invest in. For Farmmi, a company with high growth potential and a relatively low market cap, investors appear to have been on the lookout for any sort of positive news to buy shares.
Today, there appears to be some light at the end of this dark tunnel. The company released a shareholder letter highlighting various growth strategies. The expansion of Farmmi’s addressable market is something investors in FAMI stock have reason to cheer. Accordingly, this is a stock that has taken off today.
Let’s dive into what the company announced and why investors are piling into FAMI stock right now.
FAMI Stock Higher on Update Letter from CEO
This past week, Farmmi released a shareholder letter in which the company addressed various ways it can expand its addressable market. Among the opportunities discussed was an acquisition. Indeed, that’s enough to get many investors to perk up.
Here are some of the key highlights from the letter:
- Farmmi agreed to purchase agriculture and forestry development company Xiangbo in full.
- This deal, for approximately RMB 70 million, will provide cultivation and production acreage for the company’s bamboo, fir and camellia oliefera business.
- Additionally, this deal ensures the company’s purity and quality of its camellia oil, a key product for Farmmi.
- The potential for other high-quality products in the future are also made possible as a result of this transaction.
- Furthermore, Farmmi announced plans to expand its health and wellness business.
- Among the focal points is Farmmi’s intention to expand its care-management business, targeting seniors and those with higher demand for healthy foods.
- Finally, the company noted plans to expand its community group purchasing distribution network.
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.