Thursday, June 10, 2010

Del Montes Extra Cherry Dividend

Del Monte Foods (DLM) reported a very encouraging Q4 and year end. They increased the dividend some 80% and announced a three year stock buy back equal to 10% of their current market cap. They soft shoed the fact that they have decreased their cash position by $100 million mainly as a result of repayment of long term debt. They claim to be growing the top line. But they have not explained if it is increased market share, pricing power or some combination of both.

The dividend increase is a catch up. 80% sounds like a lot but it’s just a few pennies per share.

Investors need to be careful about the “Pigs Lipstick”

Disclosure: No position in any stocks mentioned in this post.