Great News from Armanino Foods

Anyone who reads this blog knows that one of my favorite stocks is Armanino Foods of Distinction (symbol AMNF on the pink sheets). Today, Armanino made its dividend announcement and it contains some very important and very good news.

First of all, let's discuss the basics. Armanino will pay the regular 1.2 cent per share dividend, but it will advance the payment date into December 2012 rather than January 2013. This is fine.

More important, however, is this statement by management:

Edmond J. Pera, President and CEO of Armanino Foods stated “Our balance sheet remains very healthy as sales and profits continue the record setting trend of the third quarter and first nine months of 2012. We are gratified by our food industry customers’ loyalties and their recognition of the value our products contribute to their success. All the signs we are seeing in the marketplace point to continued healthy business for our products.”

The fourth quarter is over 75% complete and management is telling us that both sales and profits are continuing the record setting trend of earlier quarters of this year. Normally, Armanino does not provide guidance, so this statement is the first confirmation that management is expecting a great fourth quarter result. Indeed, if the fourth quarter comes in as indicated, it seems like the stock is now selling at something like 9 to 10 times earnings. If this track can be continued, Armanino should be entitled to a much higher multiple based on higher earnings still. If the general stock market multiple does not collapse in the next 18 months, Armanino should be on its way to $1.50 per share. Meanwhile, it will continue to pay high dividends. To say the least, this is an attractive stock.

DISCLOSURE: I am long Armanino stock.