Recently Profiled Companies Show Healthy Growth - CPKF, AMNF

Chesapeake Financial Shares - CPKF

Since I wrote about the company at the beginning of October, Chesapeake has been busy. The company announced third quarter earnings of $0.75 per diluted share, 36% higher than the third quarter of 2011. The merchant card services division was a standout, increasing revenues by 32% over Q3 2011. The company also announced a 9% dividend increase to 12 cents per quarter. Trailing twelve months earnings now stand at $2.41 per share and book value per share is $18.44.

Chesapeake has just released plans to make a tender offer for up to $1.5 million of its shares at $18.50. If fully subscribed, the tender offer will reduce shares outstanding by 2.5% and increase trailing earnings per share by 6 cents to $2.47.

Chesapeake's shares were trading around $14.50 when I first wrote about the company. The current bid/ask midpoint is $17.625, an increase of 21.6%. Despite the run-up, Chesapeake Financial Shares still trades at a modest 7.3 times trailing earnings and 95.6% of book value with a 2.7% dividend yield.

Armanino Food of Distinction - AMNF

The day after I wrote about Armanino Foods, the company released its third quarter report. Sales grew 6% year over year and earnings per share grew 25%. Net income for the twelve trailing months stands at a record $2.72 million, or $.084 per share. The company's share price has remained stable at around 94 cents, allowing the P/E ratio to decline to 11.2.

I continue to view each of these companies as attractively-valued, high-quality franchises with great growth potential. I hold a position in Chesapeake Financial Shares and will continue to do so until they reach fair value.