Actually, the stock is unchanged. It had gone down almost 2.5% on selling during the half hour prior to the dividend announcement. After the announcement, there was some large buying and it got back to even.
The dividend announcement is very good news. It indicates three things for sure: 1) the second quarter results should be good; 2) the cost of the expansion is coming in as expected or better; and 3) things look good for the next few quarters. The normal time to raise the div for AMNF has been in September. This early action may mean that things are better than expected. Indeed, I would not be surprised to see yet another dividend increase in September.
Today was the highest volume for Armanino ever. It's only the second time the stock traded over 200,000 shares. The most amazing thing is that there was no news from the company. Clearly, there was a lot of buying interest.
For those who may have missed it, the reason for today's big jump is an article on Seeking Alpha that analyzes the best stock to buy to get a good return, a rising dividend and a growing company. The article names AMNF as the best choice in the market. It was written by an author with a very large following. I can' post a link, but you can get to it by going to Seeking Alpha and looking up AMNF.
I just read the Baron's article. Hopefully, it will give PNNT a Baron's bounce on Monday. From the Conference Call, it's pretty clear that the dividend is safe for the foreseeable future. Given the yield, the stock is way, way undervalued.
The key to the new customer is not the initial fill for inventory. Often, some of that initial fill is promotional, so the profit margin is very low. What is important is the steady stream of orders in subsequent quarters if the product sells well (which it should).
As for a div increase, there is unlikely to so much spent on new equipment that any increase to the div is delayed. The press release says that the work will begin in third quarter and finish in fourth quarter. That indicates that the expenditure would be something like the $700,000 spent the last time they added capacity. AMNF has over three million in cash and could easily raise the div in September.
Last, there has been some heavy volume so far today. We are already at five times the ten day average volume and there's 3.5 hours to go.
Armanino came out with earnings at 11:00. The EPS is 3 and a third cents. It's up 13% YOY. Even more important, they are expanding production to keep up with demand. There has been some serious buying since the news came out.