Inventure Foods Demonstrating Fundamental And Technical Strength

| About: Inventure Foods, (SNAK)

Inventure Foods, Inc. (SNAK) is an interesting company from a technical and growth perspective? A little over a year ago it was listed as a company that might soon go south in Seeking Alpha article: "12 Companies That Could Go Bankrupt Very Soon."

In the interim 14 months, things have turned around in a dramatic fashion as noted by another Seeking Alpha article that posed the question; could SNAK be a value investment along the lines of something Peter Lynch would have invested in?

Their current run was initiated by their strong positive year-end report for 2011.

Inventure Foods Reports Fourth Quarter and Fiscal Year 2011 Results | PR Newswire

Inventure generated net revenue for the quarter ending Dec. 31, 2011 of $44.5 million, an increase of 32.3% versus the prior year fourth quarter, attributable to double-digit gains in both the Snack and Frozen Divisions. Net revenues for the quarter were $41.1 million, an increase of 22.3%.

From their website the company describes their business as:

A marketer and manufacturer of specialty brands in better-for-you and indulgent categories under a variety of Company owned and licensed brand names, including: Boulder Canyon Natural Foods™, Jamba™, Rader Farms®, T.G.I. Friday's®, Nathan's Famous®, BURGER KING™, Poore Brothers®, Tato Skins® and Bob's Texas Style®.

SNAK has several popular, licensed product lines exmplified by very visible names including Burger King, TGI Friday's and Jamba juice. SNAK announced on Feb. 22, 2012 that they had just added a new Jamba All Natural Smoothie, the Orange Dream Machine To Its 'Better-for-You' Line of Jamba® At-Home Smoothies.

I run several screens that regularly produce stocks similar to SNAK, but this one seems irresistible from both a technical and fundamental perspective.

Growth for the last four quarters has exceeded 21% while institutions have increased their ownership to a new high level of 42%. Earnings per share for the last quarter was 33.30%. Short interest has declined to 0.80.

First and most important, over the last 10 trading days this stock has closed at the high of the day six times indicating very strong demand to get into this equity. The indicator below analyzes demand utilizing closing strength and weights that result by the true range of the stock and this result is further weighted by volume. The resulting chart is displaying very strong, unabated demand for shares of SNAK.

(Click to enlarge)

SNAK has experienced a good run, but if you look closely at the chart you will see that the price since the last breakout has gone from $4.82 to a close on Monday of $5.28 or 9%. There is still room for SNAK to continue it's run, but probably not at the same trajectory or rate of increase.

Yesterday's trading action left many strong stocks in negative territory. The DOW declined 1%, NASDAQ was down 1.8% and the S &P dropped by 1.14%. SNAK declined less than 7 cents for the day, but only after making a new 52 week high of $5.44. It did not break below it's upward trend and continues to look strong in the face of a weak market. Five analysts recommendations suggest this stock is a "buy" with no hold or sell flags. Analysts are also projecting strong future growth with projections of near term prices ranging between $5.50 and just under eight dollars a share.

Disclosure: I am long SNAK.