In recent weeks, shares of both NutraCea (NTRZ.OB) and Alloy Steel International (OTCPK:AYSI) have been taking it on the chin. Both stocks reported less than stellar earnings for the first quarter, and the stock prices have suffered as a result. However, in the grand scheme of things, the current pricing on these stocks appears very attractive, and therefore I decided to step up and add to my positions in both Thursday.
In the case of Nutracea, it is obvious that the public is doubting the demand for the company’s stabilized rice bran. Nevertheless, expansion has continued, with Nutracea recently announcing a joint venture in Indonesia as well as the completion of the expansion of their Dillon, Montana facility. Although last quarter’s revenue shortfall certainly increases my skepticism here a bit, the risk/reward appears to be solidly in my favor below $3. If the company recovers and can integrate capacity expansion into Q2 results, I believe the stock can easily go back to previous highs as sentiment shifts. Therefore, I increased my holding by 50% at $2.95 Thursday.
NTRZ.OB 1-yr chart