About ten days ago, Armanino Foods of Distinction (AMNF on the pink sheets) reported its second quarter earnings. It was a blowout quarter that set records for revenues and profits. When the earnings were released, I recommended the purchase of the stock. Since that time, the stock price has risen by 10% and it is staying at that level. We have yet to see any real retracement from the current heights.
There is a good reason for the current high level. If Armanino runs true to form, it will raise the regular dividend with the next report. My best estimate is that we will see a dividend of 1.5 cents per share. That will put the dividend yield for the stock at 6.8 percent based upon the current price of 88 cents per share. In today's low interest environment, the dividend alone ought to move the stock up to $1.00 per share (where the return would still be 6%).
Obviously, this is a projection which may not come to pass, but it seems quite likely based upon past behavior of the company. Just imagine, here is a stock that would be growing quickly (profits per share were up 25% from last year), paying a very high dividend, and forecasting a rosy future. To make things even better, the company's business is of a type that would not be likely to suffer in an economic downturn. Italian sauces and foods will still be in demand.
Despite the 10% rise since the earnings, I am still recommending purchase of AMNF. It ought to have quite a way further up to go even from these heights.
DISCLOSURE: I remain long Armanino stock.
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