Today we are initiating coverage on KBS Fashion Group Limited (NASDAQ: KBSF), a leading player in the fashion menswear space in China. We believe KBSF shares could be greatly undervalued.
Estimated percentage of float sold short is 16-18%, and there is a good possibility that it is even higher now. If we stay the course could we see a big squeeze here?
Some of the largest gains our members have made in the past has been short squeeze plays ranging from 100-700% in a very short period of time, no pun intended. Check out this “how to play a short squeeze” article from seeking alpha – https://seekingalpha.com/article/1400161-how-to-play-the-short-squeeze-and-when-to-cash-out
KBSF is a Chinese company operating primarily in China, so any US tariffs will not impact the company.
Current price $3.85
52-week range $2.03 to $15.00
Outstanding shares (est.) 2.2 million
Float (est.) 927 thousand shares
Book value $32.66 per share
Cash per share $10.93
Insiders own 45% of the outstanding shares
KBS Fashion Group Limited, is a casual menswear company that designs, markets, and sells fashion menswear products in the People’s Republic of China. The company operates an owned corporate store and 38 branded stores.
On September 13th the company announced that its wholly-owned subsidiary Anhui Kaixin has formed a long-term strategic partnership with Hangzhou Yiyuan Apparel Co., Ltd. Given Kaixin’s expertise in down jacket production, the partnership is positioned to supply Yiyuan high quality products to drive KBSF sales.
News about undervalued companies like KBSF travels fast, keep an eye on this one.
Conclusion:
Though the company is struggling with profitability, the share metrics for KBSF speak for themselves.
$32.66 per share book value and $10.93 per share in cash. Only 927K shares in the float.
The company’s market cap is $8.5 million and annual revenue is $22.5 million, yielding a price to sales ratio of .37X. Utilizing a “good” P/S ratio of 1.0X, KBSF could trade at $10.22 per share.
The company shares are trading at a discount of 75% off the 52-week high.
At 6-30-18 the company only had $1.59 million in debt.
As the chart below indicates, the current RSI (14) is 46.08 and the 50 DMA and 200 DMA are $4.41 and $4.82 respectively. These data indicate shares that may be oversold.
We believe that KBSF shares may be dramatically undervalued and could yield significant gains in the near term
Watch for updated coverage on KBSF shares coming soon.
The Traders News Group
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