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Strategies & Market Trends : Value Investing

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To: MCsweet who wrote (44599)	9/26/2011 9:30:11 PM
From: E_K_S	Read Replies (1) of 78715

Hi MCsweet - Armanino Foods of Distinction Inc. (AMNF.PK) Wb Site: armaninofoods.com The key with this one is to structure your buys at a price that's in your comfort zone and keep your overall position w/i your portfolio diversification allocation. For me I have built my position to a 1% portfolio position w/ three different buys since 10/2010 at $0.64/share, $0.71/share and $0.86/share. AMNF is not a typical penny stock and with some research you will see why they have structured the company to keep their stock price below $1.00/share. It has to do with certain type of SEC reporting requirements and filings that make it arduous and costly for a small company. That said, as the company grows (they are now expanding their distribution through out the U.S.), builds out their product lines (a new "pesto lite" product introduced in late 2011) and grow their revenues, it's just a matter of time before they will either (1) be acquired or (2) expand their operation through merger or organic growth to a $100M company (Current Market Cap is $26M). Also, most of the monthly Pink Sheet share volume (w/i next 12 months) should come through ATM (At The Market) buys from the company through their announced stock repurchase program. This should help stabilize the pink sheet stock price. There are times you can buy shares with a "low ball" GTC Bid order when a seller wants out and there are no buyers. The spread change can be as much as 10% of the price or about $0.07/share. Make sure you use "limit" buy orders and "limit" sell orders on this one. This is a long term hold for me and I earn 6% while I wait. As long as the company grows their business and does not try to expand too fast (w/o using debt), I will continue to hold. They are on track to earn $0.075/share this year and $0.09/share next year (my guess - reflects 3M share buy back 2011-2012). The company is growing their sales by 20% per year and had their YOY annual earnings increase by 16%. They are maintaining (and even expanding) their margins w/ more efficient facility processing even as they expand their distribution network nationwide. As the company shows they can maintain this growth over the next 24-36 months, I expect the stock to be priced at a 12 PE. This should price the stock at $1.10/share in 2012 which would still be a value considering their 20% growth rate. I also like this "food" sector as it is in the value added food chain where they deliver excellent value to their customers while maintaining their "High End" quality (healthy & organic). In 2011-2012 the company is introducing a new "lite Basil Pesto" line with 50% less Fat and 25% less sodium. This product is targeted to the health care market which is a new niche market segment that one of their Food Service distributors sell through. That's my take. It's not a screaming Value Buy but one that should be a good grower and over looked because it is only sold in the Pink Sheets. EKS

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