One of my favorite stocks is Armanino Foods of Distinction (symbol AMNF on the pink sheets), and I have written about it repeatedly on this blog. Armanino announced mid morning today that it was increasing its stock buy back program by a second million dollars over and above the first million that had been authorized. Previously, Armanino had repurchased just under 4% of its stock, and now it will buy about another 3%. While a stock buy back will increase the EPS for the company, the real import of today's announcement is something else, namely that Armanino's management sees growth and good earnings ahead. Management at Armanino has always been quite conservative in its approach to corporate finance. For a long time the company had no debt, and it paid out most earnings as dividends. It still pays a sizeble dividend and usually pays a special dividend each year as well. If management is prepared to also pay out another million dollars for stock repurchases at this point, one can only conclude that the prospects of the business are bright indeed.
So far, the market seems impressed with today's news (as it should be). The stock is up 4.5% on heavy volume. As the news spreads, the price should continue to rise. Further, as the company restarts its purchasing program, the daily volume should rise as well with further benefit for the stock price.
I maintain my $1.30 target for the stock.
Disclosure: I remain long AMNF.
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