Kingold Jewelry: A Chinese Gem Hidden For The Last Two Years
A couple of years after the China fraud fears, stocks such as Kingold Jewelry (KGJI) continue to trade below book value. The producer of 24-carat gold jewelry continues to grow via market share gains, but until recently the stock traded as if the stock was going out of business instead of constantly generating solid profits and substantial growth.
The company makes branded and customized jewelry, ornaments and investment-oriented products. For the branded products, Kingold purchases gold directly from the Shanghai Gold Exchange, thereby, requiring a significant amount of gold inventories. For the most part, the company is a manufacturer of gold jewelry, but it does hold the risk of the fluctuations in gold prices.
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