AMCON Distributing's Thanksgiving Treat: 300k Float, Undervalued Stock

Every year it seems a low float stock takes off the week of Thanksgiving, especially the day after Thanksgiving (see Pointer Telocation (PNTR) last year). This year, one stock to keep watch on is AMCON Distributing Company (DIT). DIT has approximately a 300k float and approximately 800k shares outstanding. The Company recently reported $5.13 in eps for the year. However that amount included legal fees of $2 million dollars ($1 million in the second and third quarters) that are no longer costs going forward as they have settled the lawsuits. EPS from continuing operations for the most recent year ended was $4.89. The $2 million in legal expenses for cases that have now been settled would have made EPS for the year over $7 (2 million divided by approximately 800k outstanding shares). The Company reported $1.90 eps for the fourth quarter from continuing operations representing the first partial quarter with legal expenses gone. With this kind of eps, low float and outstanding structure, DIT is a stock to keep on the radar. Industry PE is 18-20.

AMCON is a leading wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, food service, frozen and chilled foods, and health and beauty care products with distribution centers in Illinois, Missouri, Nebraska, North Dakota and South Dakota. Chamberlin's Natural Foods, Inc. and Health Food Associates, Inc., both wholly-owned subsidiaries of The Healthy Edge, Inc., operate a total of 13 health and natural product retail stores in central Florida (6), Kansas, Missouri, Nebraska and Oklahoma (4). The retail stores operate under the names Chamberlin's Market & Cafe and Akins Natural Foods Market.

Links :

• Amcon 2Q Earnings
• Amcon 3Q Earnings
• Press Release

Disclosure: Author has a long position in DIT