FAMI: Currently Despised Farmmi Stock Could Soon Yield a Bumper Crop

If you’re willing to contradict the crowd, here’s an interesting investment to consider: agricultural products company Farmmi NASDAQ:FAMI, clearly out of favor, as FAMI stock is absolutely tanking now.

To be honest, you won’t find a whole lot of Farmmi fans on Wall Street. It takes a certain personality type to be able to buy a stock when so many traders are selling it.

Sure, we might consider FAMI stock a potential candidate for a Reddit-fueled short squeeze. After all, the stock is cheap, the trading volume isn’t too high and Farmmi is definitely an underdog as a company.

On the other hand, you don’t have to pray for Reddit to save Farmmi. If we dig deep enough, we can actually find reasons to believe in the company — and maybe even consider owning a few shares for the long term.

A Closer Look at FAMI Stock

Reflecting on the price action of FAMI stock earlier this year, it’s entirely possible that some Reddit traders already gave it a pump.

The stock started off 2021 at $1.14 before suddenly jumping to $2.47 in February. But there really wasn’t any company-specific news catalyst to justify a quick doubling of the share price.

These pumps can lead to dumps and unfortunately, FAMI stock soon started on a prolonged and painful slide. In fact, the share price crashed below $1 in April, even dropping below 25 cents in September.

By September 24, the stock was trading at 20 cents. It felt as if everybody and his uncle hated Farmmi.

Or maybe they didn’t hate Farmmi in particular. Perhaps they just weren’t in the mood to buy any Chinese stocks at all.

Acrimonious Relations

Back in April, when FAMI stock was falling fast, InvestorPlace contributor Chris MacDonald observed that an entire sector — or I should say, region — of stocks was tumbling:

“Nearly across the board, small- to large-cap Chinese stocks are seeing weakness today. It appears yet further acrimonious relations between President Joe Biden and Chinese President Xi Jinping are driving wariness in the stock market today.”

Neither MacDonald nor Wall Street could possibly have known just how much worse the sentiment would get.

In the past several months, the Chinese government has implemented security and antitrust crackdowns against a number of the nation’s businesses.

On top of that, Chinese property-market giant Evergrande OTCMKTS:EGRNF appears to be failing.

So now traders have acrimonious relations with Farmmi, even though the company hasn’t done anything objectionable.

If you would prefer not to invest in any Chinese companies, that’s a choice you can certainly make. However, it’s hard to imagine that a small agricultural product supplier would be on the Chinese government’s radar.