Bridgford Foods Shares Continue to Skyrocket

Apr.12.09 | About: Bridgford Foods (BRID)

It has been a beautiful thing, being long the market this past month, but even more beautiful is being lucky enough to have BRID as part of your portfolio. While the Dow has jolted more than 23%, the snack food maker has darn near doubled on a intraday basis-running from $2.55 to $5.08 per share. Its relative strength is simply off the charts. On March 10th, shares skyrocketed 66% on the heels of a fabulous earnings report, and then on Thursday, they reached a high of $5.08 on a 52% jump, before closing up 33% to $4.45.

Volume finally materializes: Thursday’s trading action saw BRID’s largest volume day in approximately 14 months. This spike in volume could be construed as a very good sign, as volume typically precedes price. The volume increase could be attributable to short covering, the company repurchasing its own shares or institutional activity.

New 52 week high?: The stock is nearing its 52 week high of $6.80 which is coincidently very close to the price BRID purchased a 402,000 share block from its former largest outside shareholder last year. The shares could reach a new 52 week high if they repeat another trading day like last Thursday, but don’t hold your breath for an all time high-that milestone occurred 18 years ago when the price momentarily hit the $25 mark.

Bottom line: Don’t get greedy on this one. If you have a decent profit, ringing the cash register at this juncture to book some profits is not a bad idea. You can always buy back in if you have to, and nobody ever went broke taking a profit. Stocks simply do not go straight up, and BRID’s torrid appreciation pace is likely unsustainable. The stock simply needs to “pause to refresh” before it can embark on its next leg up. BRID’s next milestone won’t occur until the first week of June, when it is slated to report second quarter results, so in the meantime, relish the victory by savoring the spoils!

Disclosure: Long BRID.