American Italian Pasta Co (AIPC) is a newly listed stock, but early investors have been handsomely rewarded. The stock has been on a run since its IPO and shows no sings of slowing.

Company Description

American Italian Pasta is the largest dry pasta producer in North America. The company makes every type of pasta from spaghetti and linguine to ziti and egg noodles. Products are traditional pasta in addition to organic and a variety of wheat and whole grain based noodles.

The company was founded in 1986 and is now one of the fastest growing pasta producers, distributing through the U.S., Canada, and Mexico. American Italian Pasta is headquartered in Kansas City, employs roughly 650 people, and carries a market cap of just over $600 million.

Net Income Up 18 Fold

On Feb 11 American reported first quarter results for fiscal 2009 that included net income of $26 million, up from $1.4 million one year ago. Earnings per share came in at $1.23 compared 7 cents for the same period in 2008.

Revenues rose 53% to $171 million, up from $112 million. Retail and institutional markets saw a 56% and 43% increase in revenues, respectively.

The announcement smashed Wall Street’s expectations whose estimates were averaging 43 cents per share. American’s great quarter is coming off the heals of its latest surprise, when they announced 54 cents per share compared to the consensus of 27 cents, last quarter.

Excellent Growth Rates

As consumers seek low cost meals, many are turning to pasta so it is no surprise that company analysts are projecting excellent growth rates. Keep in mind, the earnings were released recently and analysts have not had time to update estimates.

However, before the announcement the consensus average for fiscal 2009 was $1.83, 56% higher than 2008. Forecasts call for $2.19 in 2010, another 20% year-over year growth.

The Chart

AIPC has only been listed for a few months, but the stock is performing great. Shares have doubled in price since November thanks to 2 excellent quarterly reports. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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