Huadi International Group Co., Ltd. (HUDI) Published: 2022-11-05
What is going on with Huadi International Group Co., Ltd. (HUDI)? Their stock got my attention when it was up a cool 716% this past week. Wow!
This is a weekly chart.
Just what do they do, anyway?
They are a Chinese company and they make stainless steel seamless pipes, tubes, bars, and plates. Pretty sexy. OK, well, not really.
But sometimes the boring businesses can be some of the best investments so let's take a look at their financials.
They are profitable so I'll give them that. They also have a really high insider ownership at about 75% and there are not many shares outstanding, but the revenue growth (and especially the earnings growth) is stagnating.
So why the surge in stock price?
Well, apparently, HUDI
caught everyone's attention this week when they announced a new strategic plan
to invest in clean energy. That sector is definitely sexy and has the ability to transform companies literally overnight. They announced this plan on November 3 pre-market, and then over the next two days their stock took off in a short squeeze. There must have been some really juicy stuff in that strategic plan, right? Wrong. They just initiated some discussions with government officials and went on a few field trips. Now, I'm sure there's a lot more to the strategic plan than they mentioned there, but there is nothing much in terms of real specifics mentioned to justify such a surge.
Money Is Money
I am never one to look a gift horse in the mouth, and if I had been holding this stock this week (I was not), I would certainly be happy. But with these low float stocks you just never know when and where you'll see a rip-your-face-off short squeeze like this one. They tend to come out of the blue.
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