American Italian Pasta Company (AIPC)

Pasta has shown to be a food that consumers switch to during tougher economic periods. Since we will see continued economic weakness till at least the second half of 2011 this company will benefit nicely. Imports from foreign pasta makers will be hard hit by a weaker dollar which will benefit domestic pasta makers such as AIPC. Add this to a lovely balance sheet and attractive cash flow and you have a recipe for success.

Undervalued - I think people are rushing into less "safe" stocks than pasta... and have overdone it as the economy recovers. This price will be rising; 40 by this time next year, and likely recovering up to 30-32 in a week or so.

Its a macaroni and cheese kind of economy. Low P/E of 11and 7% annual revenue growth over five years, I think AIPC is a sleeper stock for the long term.

PE ratio low. Rising on more than 2 times average volume. Technical chart looks good. If you think that the market knows something you don't, chances are it does. Don't try to outsmart the market, because whether you like it or not the market is often smarter than you.

If Kraft don't buy it, I did, and they will. This niche company is ripe for the pickins'.

Clue #1
Two former execs from AIPC plead guilty to fraud to overstate earnings, admitting to structuring round-trip transactions with a company they acquired to rig their books.

According to the SEC fraud accounted for 66% of their earnings

Yahoo has AIPCs yearly earnings growth rate at 1767.10% in the midst of a depression, pretty high for a company with a history of fraud and overstating earnings...

Old news though right?

Clue #2
In 2005 they borrowed 2.2 million to restructure their company via warrants. The lender just cashed in the last of their warrants for 12 million at $34 a share.

It must have been an amazing restructuring plan to only spend 2 million to take a failing pasta company that was doctoring its books 1000% off its lows to nearly a billion dollar market cap while the rest of the market dropped 50%.

What could they have even done with that amount of funds, repaint their buildings? More likely they used the 2 million in funds to keep the lights on and then resumed creative accounting policies.

Clue #3 If their creative accounting days are behind them (2002-2004) what were they doing paying out dividends 3x their earnings in 2007 and 2008? Why did they have a -85% earnings surprise last year?

Current $34
Target $14

sells ro all discounters

cheap and easy... Lots of macaroni and cheese during recession

Triple-digit earnings growth in recent quarters, 320% price gain in last 12 months, strong sales growth, best of breed in Food-Flour & Grain industry which provides cheap food in shaky economy, stock trending higher after strong earnings report, 10 week moving average support. IBD

It's Feb. 13th and the SPX symmetrical triangle is going to force a market direction, likliest direction is down. AIPC has done too good, too quickly, over a very arduous period. A VERY contrarian call here when the chart looks like there is no top... we'll see

Noodles are a cheap meal people need to eat cheap

CAPS ratings list this as up almost 300% for the year. This when everyone else is losing money.

Love Pasta

This stock went through some major problems with a bad CEO and Chairmanthat lead to no filings of K10's by the company for three plus years. Because of the listing filing problems they were dilisted form the New York Stock Exchange. The stock is now listed on the Pink Sheet but within the next few months will go back to one of the exchanges. Its problem are behind ti and it stayed profitable. I would think they could hit $20 in the next 12 months if they get listed.

P/E of 40 for a company that makes pasta in the US?

This stock is a great one because if you just look at the last two days intraday charts you will see that this stock has been on the uptrend and has kept up the trend which is good for the stocks that you want in your portfolio in order to make any money.

risk

Stock trades well below its book value.

I know a little about the pasta making business from some of my family working and owning a machine company that makes pasta ( I worked there several summers in HS). The company no longer exists - Demaco. They were good at there business and they supplied for all the big guys like Ronzoni etc for over 50 years...This is a difficult business with small margins. Invest in something else - high risk with low growth prospects