Last week I recommended Armanino Foods as a buy in advance of the earnings report due this week either yesterday or today. Well the first quarter report was just released by the company, and it was even better than I expected. Sales were up to $6.7 million, and increase of 14% over last year. Earnings per share hit 2.0 cents, up 23% from the same quarter last year. These numbers would be great results for the second or third quarter, but they are a home run for the first quarter which is usually the slowest of the year. Indeed, the revenues were the second highest quarter in company history.
The CEO comments point out that Armanino is gaining market share in its various regional markets (although no figures are provided for this.) Even the rise in commodity prices is mentioned, but it is not serious enough to cause the company to raise prices.
The stock has already started to move in the twenty minutes since the report was issued. It is up 4.4% at 82.5 cents.
Armanino has historically moved its revenues and earnings in long arcs. In other words, once the company starts to move up it continues on that trajectory for quite a while. This makes it more likely that the big move up with revenues and earnings will continue for the rest of the year. If so, the stock price could easily respond with a further gain of 20 to 30%.
DISCLOSURE: I am long Armanino and have a substantial position in my accounts.
1 comment:
As a recent shareholder, i am impressed with company overall. The p/ e is very attractive for a seemingly growth company. Great potential,,, the penny stock issue can be reduced if there was a reverse- split so stock could trade over five dollars,,,,adds value !
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