Vita FD Products (AMEX:VSF)
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Dutton Associates continues its coverage of Vita Food
Products (AMEX:VSF) maintaining a Speculative Buy rating and raising
its target price to $3.60. The 10-page report by Dutton senior analyst
Gerald F. LaKarnafeaux, CFA, is available at www.jmdutton.com as well
as from First Call, Bloomberg, Zacks, Reuters, and other leading
financial portals.
The Company has been undergoing a transition in management since
June of 2005, when CFO Cliff Bolen was promoted to Chief Operating
Officer. The recent changes call for the establishment of an Office of
Chief Executive. Revenues in 2005 continued the under-performance
reported over the past two years. Revenues in 2005 were down by 3.9%
to $46.9 million, while revenues in the fourth quarter were higher by
approximately 2%. The Company has reported strong qualitative and
quantitative fundamentals over the past six months. The stock has
responded by appreciating from $2.40 per share to the current price of
$3.35 per share, which is 6% above our last target price of $3.15 per
share. We believe the fundamentals justify an increase in the 12-month
target price to $3.60 per share. In 12 months, we believe the Company
should report earnings per share of $0.21, with the prospects of
higher earnings in 2007. The price earnings ratio on the new target
price is 17 times, which is reasonable for a food processing stock
considering the anticipated strong relative earnings performance. We
admonish the reader that the sharp appreciation in recent weeks could
result in short term volatility until the first quarter is reported in
the next six weeks. However, in spite of the potential profit-taking
following the run up in the stock, we are maintaining our Speculative
Buy rating.
About Dutton Associates
Dutton Associates is one of the largest independent investment
research firms in the U.S. Its 29 senior analysts are primarily CFAs,
and have expertise in many industries. Dutton Associates provides
continuing analyst coverage of over 130 enrolled companies, and its
research, estimates, and ratings are carried in all the major
databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program
is US $35,000 prepaid for 4 Research Reports, typically published
quarterly, and requisite Research Notes. Dutton Associates received
$71,000 from the Company for 12 Research Reports with coverage
commencing on 5/07/2002. The Firm does not accept any equity
compensation. Our principals and analysts are prohibited from owning
or trading in securities of covered companies. The views expressed in
this research report accurately reflect the analyst's personal views
about the subject securities or issuer. Neither the analyst's
compensation nor the compensation received by us is in any way related
to the specific ratings or views contained in this research report or
note. Please read full disclosures and analyst background at
www.jmdutton.com before investing.