Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Amira Nature Foods Ltd. Soared 16% Higher Today

By Daniel Miller - Jul 16, 2015 at 11:27AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A bullish quarter and high percentage of shares sold short was the recipe for Amira's 16% gain early Thursday.

What: Amira Nature Foods Ltd. (NYSE: ANFI), a international producer of packaged foods and specialty rice with more than 200 SKU's selling in over 60 countries, is moving 16% higher in early Thursday trading. The company announced fourth quarter results of its fiscal 2015 and bullish investors liked what they saw -- and investors selling shares short didn't.

So what: Amira Nature Foods recorded respective revenue and adjusted EBITDA increases of 22% and 25% to $226 million and $6.6 million compared to last year's fourth quarter. The company's adjusted EBITDA margin reached nearly 15% and adjusted earnings-per-share checked in at $0.52 compared to last year's $0.47 and average Wall Street estimates of $0.49. 

"Our strong fiscal fourth quarter and full year performance reflects increased demand for our products across categories and geographies. We are seeing revenue growth around the world – in India, our important home market, and across the emerging markets geographies of Middle East, Africa and Asia." said Karan A Chanana, Amira's Chairman and Chief Executive Officer, in a press release. "We are also seeing signs of continued strength in our smaller, but rapidly expanding developed world business, where we entered into new relationships in the UK, Continental Europe and the United States. "

Now what: Part of the driving force behind Amira Nature Food's pop in stock price this morning could be bears covering their short positions after a strong quarter. The current short interest on the company is 28% with about 4.49 shares short as of 6/30/2015. 

Amira expects double digit fiscal 2016 revenue and adjusted EBITDA growth while maintaining its full year guidance of $1 billion of revenue and $150 million of adjusted EBITDA. Amira generated record full year and quarterly revenue, adjusted EBITDA and adjusted EPS, and has eleven consecutive quarters of double digit revenue and profit growth as a public company.  

ANFI Chart

ANFI data by YCharts

As the company continues to build out distribution around the globe and capitalize on consumer demand for healthier and more premium rice, its overall business should continue to improve. The company's stock price has been trending higher since early February and with improving quarterly results and a slew of bears potentially covering short positions, the stock could continue higher although I personally will be watching this one from the sidelines.

Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.