Stay Away From Yongye International!
They have been attacked recently by short sellers on several occasions. I have 3 reasons I have found that make me want to stay far away from this stock. The first is their exceptional rate of growth. They claim they have gone from distributing to 1000 stores to 26000 stores in around 2 years. This type of growth strikes me as highly unlikely. If this was a tech company maybe I buy their story but this company just makes fertilizer.
The second reason I don't buy their story is after these short attacks the company has not bought back shares. Ebix was recently under short attack and they did the smart thing and bought back shares immediately. Doing so gives investors confidence in the company. Yongye has 50 million in cash and has not bought back any shares. Some have argued that they want to invest their money into the company instead of buying shares. Yongye claims they have grown profits 50% in the last year. Its stock has a p/e ratio of 5 and if you follow Peter Lynch a p/e ratio should equal its growth rate. So the p/e ratio should be 50 which means this company is valued at 1/10 of its real value. If they company is real buying back shares would be the best investment the company could make because they would be buying something that is worth 10 times more. No investment in their company could ever match this return on investment.
The last reason is that in the last 2 years there have been no insiders buying stock even after the short attack. If you knew a stock was worth 10 times what it is currently priced and you are an executive who knows for sure how healthy the company is why don't you buy all the stock you can afford. Even the people who run this company won't buy the stock for 90% off which I find particularly damning. Get on Yahoo Finance for yourself and look up the insider trading history for this company.
If you ever find proof that insiders or the company have actually purchased and not just announced that they are going to buy stock then go ahead buy the stock but until then you would be really wise to stay away from this one.