Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Update - Amcon Clue Assumptions Confirmed

|Includes: Amcon Distributing Company (DIT)

On November 2, 2009 the GeoTeam® highlighted Amcon Distributing as a company giving us "clues," indicating that future quarters would show continued EPS growth.

The Clues were:

1. Insider buying- Management has been buying stock rather routinely over the past year, even as the stock attains new 52-week highs. We view this as a strong signal from management about near term growth prospects.

2. The company announced that it will acquire a wholesale distribution firm boasting $60 million in revenues and over 300 customers. We don’t have any details on the growth trend or margins of the firm to be acquired. Using Amcon's current margins, $60 million in revenues would equate to additional $0.74 EPS. Also, keep in mind that the Company can now push its own products through this new customer base.

3. On October 29, 2009, Amcon announced that it increased its quarterly dividend by 80%.

4. Amcon recently paid down $8.6 million in debt.

5. The third and fourth quarters are Amcon's strongest periods.

6. The Company has just seven retail operations, leaving room for expansion.

At least for today, DIT delivered by capping off its fiscal 2009 year with a stellar fourth quarter.

4th QUARTER 2009 vs. 2008 FINANCIAL SNAPSHOT ENDED SEPTEMBER

Fiscal Year ends September 4th Quarter 2009 4th Quarter 2008 Period Change
GAAP Revenue $253.0 million $236.0 million 7.20%
GAAP EPS $3.40 $2.09 62.68%
Fully Diluted Shares 781,265 851,298 8.23%


Amcon still faces a challenging economic environment and has performed so far. This bodes well for the Company as the economy continues it recovery.

At $64.33 per share the stock has a modest P/E of 5.9 with trailing EPS of $10.87, an appealing situation for value investors.

Disclosure: Long DIT