Watch Winn-Dixie Dance

Roller coaster, perhaps? No, if a coaster had curves this sharp, its cars would crush one another as they upturned. Heart monitor print-out? Possibly, if the patient is going into seizures every few moments. Maybe the best illustration would be a downtown Baltimore street. But I’m not sure that image will communicate to those of you outside the Eastern U.S. exactly the amount of potholes, ripples and bottomless pits in this company’s stock chart.

Winn-Dixie (WINN) has been bouncing all over the place. The stock peaked at $32 about a year ago, but it soon guttered to almost $15 four months later, after which it hit a moderate high before falling even farther. But it has been on an uptrend of late. That is, it was on one before “The Great Tomato Scare of 2008.” Winn-Dixie stores removed tomatoes and about 12% of the stock’s share price at the same time in June.

But now WINN is finally recovering, and barring any new infectious bacterial outbreaks, which can’t really be predicted, but neither can tornadoes… Wait we do try to predict those. So I guess that analogy is rather pointless. But barring those pesky salmonella, the company’s stock should be pushing above $20 any day now.

WINN was up more than 14% just yesterday, on news that the stock was upgraded by Friedman, Billings, Ramsey & Co. And the store has begun offering bioplastic water bottles (biodegradable plastic made from corn starch or other vegetable products). The move will help Winn Dixie in a bid to upgrade its image and appeal to the green-conscious consumer. Now let’s sit back and watch that stock dance.

Disclosure: none

Comments

[Ames Tiedeman:]

Did this name get rid of most of its debt a few years ago? What is its debt to equity ratio? Are they expanding?

2008 Jul 16 07:31 AM

[valueinvest...:]

I shorted this thing until it went bankrupt the first time (I was short from $12 the first time) and my guess is it will go bankrupt again. If you are relying on these new plastic bottles to make a difference then things must be more despertae than I realized. Then again, everyone knows that FBR analysts are never wrong, so it truly must be a buy.

2008 Jul 16 08:15 AM

[David Livin...:]

Yep, those plastic bottles are going to save Winn Dixie from the onslaught of more Wal-Marts, Publix, and Aldi. Compound that with the fact that Winn Dixie has never been a good operator and never will be. Definitley another bankruptcy coming. You can't add a coat of paint, some new carts, and expect shoppers to suddenly stop shopping at superior competitors.

2008 Jul 18 12:24 PM