Ever-Glory International Group Inc (NASDAQ: EVK) is screaming for the top yet again in the market this morning, trading on gains of more than 180%. What’s surprising is the fact that there is absolutely no news out there. The company hasn’t issued any press releases or SEC filings, and investors are scratching their heads, wondering why the stock is headed up. Here’s what’s going on:
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EVK Stock Rockets As Traders See Opportunity
Ultimately, the gains that we’re seeing out of Ever-Glory International Group have no fundamental rhyme or reason. Istead, this is a move from the technical traders on Wall Street.
The first thing I look at when I see a run like this is the public float of the stock. At the moment, EVK has a public float of under 4 million. That’s ultra-low, and when there’s an increase in interest with few shares actually available, it tends to send the stock screaming for the top.
That’s taking place right now.
Where Is The Increased Interest Coming From
This is the mystery of the run. The fact of the matter is that there is no clear catalyst sending EVK stock for the top. The Chinese fashion company hasn’t announced increased sales, marketing campagins, or new fashion lines. Nothing is out there.
Nonetheless, there’s one good reason for the excitement.
Pretty soon, the United States will be ran by President Joe Biden following his recent win of the United States Presidential Election. That’s good news for any company that depends on growth within the Chinese economy.
As a key player in Chinse Fashion, Ever-Glory International will benefit greatly from a Biden Presidency. Think about it. Over the past few years, the United States and China have been in the middle of a Trump-led trade war. With Biden in office, tensions between the United States and China will likely ease, leading to a positive economic impact for China.
As a result, we’re likely to see more consumer spending in china in the coming years, which bodes well for EVK and its investors.
Is it worth a nearly 200% gain? Probably not, and profit taking will take place at some point. Nonetheless, the long-run prospects for EVK seem appealing.
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The Bottom Line
The bottom line here is simple. Traders are going wild, sending EVK stock through the roof. However, the movement is opening eyes to the potential opportunity. Once the profit taking ends and the stock is back to a more reasonable valuation, it may be time to get in considering the change in leadership in the United States and the benefit the change in leadership will provide China and Chinese companies.
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