China Marine Food Group Limited (CMFO)

[geodan]

Motley Fool recommended CMFO, to my surprise

One Wildly Mispriced Stock You've Never Heard Of
You won't believe this mispricing.
Anand Chokkavelu, CFA
Updated: Nov 9, 2016 at 8:40PM
https://www.fool.com/investing/international/2010/05/18/one-wildly-mispriced-stock-youve-never-heard-of.aspx

So why invest in a foreign small cap?
At this point you may be forgetting why anyone would invest in a small foreign company. Let me remind you. For those investors with a competitive advantage, there are serious opportunities to rake in outsized returns due to stock mispricings.

Let me give you an example.

The company is called China Marine Food Group (AMEX: CMFO). It sells salty seafood snacks like dried squid and barbecued sleeve fish.

To the average sane American investor, this sounds (1) gross and (2) not worth further research. But Motley Fool Global Gains co-advisor Tim Hanson would disagree on both counts. These snacks won't play in Peoria, but Tim notes that "they're basically the Chinese equivalent of potato chips." And boy is he glad he investigated further.

He found a company trading for a P/E ratio under 5, but after backing out the cash, the multiple was just 1.7 times earnings -- for a stock expecting more than 20% top-line growth.

If you've been following along, you can probably guess why it was so cheap: It's a very small Chinese company that makes questionable-sounding snacks. It operates in a country known for its government interference, not its corporate governance. Kraft this ain't, folks.

So is China Marine Food Group a buy?
As part of his duties as Global Gains co-advisor, Tim supplements the knowledge he gains at investor conferences with trips around the world. On his trips to China, for example, he meets with companies' management and tours their facilities. These meetings not only allow him to vet specific stock picks, but also allow him to compare and contrast companies, industries, and countries.

This on-the-ground experience is why he judged the risk to be worth the potential reward on China Marine Food Group when he recommended it back in May 2009. It's gone up over 140% since then, so it no longer trades at that 1.7-times earnings figure -- but Tim still rates the company a "Best Buy."


That article says 2016 but there were no USA books then, seems odd. With no books am surprised that most with the stock have not sold it as they can. It is still a mystery stock to me.