Origin Agritech (SEED) is one of those China stocks that will run 200-300% in a day, like it has in the past. Today it is getting some nice ask volume, so we are positioning ourselves with some June 16th $2 calls at .05. Options provide a great opportunity to take little risk and have possible large returns. We think Origin Agritech (SEED) may provide that sometime soon.
I may seem stupid now, and we may have a few more down days, but...
It was a little more then two weeks ago, that we wrote about Origin Agritech Ltd (SEED). Since then, the stock has faded under $2 on decreasing volume. That changed this afternoon as a filing hit the wires showing the new CEO has continued buying up shares and now holds over 19% of the outstanding shares.
We will find out tomorrow whether this is the news that sprouts new life on the stock or just a short lived pop. Either way, we like a stock where the CEO is locking up shares... especially one trading near its 52 week low.
Keep Origin Agritech Ltd. (SEED) on watch for the rest of the week.
We rarely play sub $5 stocks at OptionMillionaires. Quite honestly, it makes more sense to buy a stock outright, then spend money on options when it is trading under $5. But there are exceptions to every rule, and Origin Agritech Ltd.(SEED) is one of them. Why? Because this is a stock waiting to explode on positive news. It seems like everyone and his brother has let this stock to rot, then kicked it to the curb and ran it over with their car.
CEO leaves the company for personal reasons? Sell! China stocks getting a bad rep from RINO and other scams? SELL! Company lowers revenue guidance?? SELL SELL SELL!!
Only problem with the selling, is noone stopped to take a look at what they were selling. As of the close on friday,Origin Agritech Ltd.(SEED) has a market cap of $57 million. Last Quarter they reported $49.2 million in revenues and an EPS of .20. When AGS were as hot as they are now, Origin Agritech Ltd.(SEED) was trading at over $12 per share. Now do your research, then ask yourself... "What has changed in the past 2 years that has caused Origin Agritech Ltd.(SEED) to lose 75% of it's value"?
Below is 2 charts, Monthly and Daily. We fully expect Origin Agritech Ltd.(SEED) to breakout near term over $3. We alerted our chat to the $3 calls @ .10 on friday. We have a funny feeling Origin Agritech Ltd.(SEED) will be sprouting nicely this coming week.