Nash Finch Co.

Nash Finch Co. (NAFC - Analyst Report) shares are surging after its third-quarter earnings announcement earlier last month. Sales rose more than 5% and the stock is pressuring its 52-week high.

Company Description

Nash Finch Company is one of the largest food distribution companies in the United States. Its business consists of three primary operating segments. The wholesale distribution segment supplies food and non-food items to independently owned retail grocery stores, corporately owned retail grocery stores and institutional customers. Its retail segment is made up of corporately owned retail grocery stores with a variety of store formats. The military distribution segment, which supplies food and related products to military commissaries.

Third Quarter Sales Up 5.1%

Total sales of $1.44 billion were announced during the company's third-quarter earnings announcement on Nov 6. Sales rose 5.1% on a year-over-year basis, up from $1.38 billion.

Earnings per share came in lower than the third quarter of 2007 due to non-cash LIFO charges, but those number were also inflated last year due to one-time tax savings. Adjusted earnings per share came in at $1.00, 12.4% higher than the consensus estimate of 89 cents.

Consensus Rising

Since the Nov 6 announcement analysts have been raising their estimates across the board. The average estimate for cull year 2008 is up 13 cents, to $3.30 per share. Next years consensus is now $3.73, up from $3.68.

These estimates represent 10% growth for 2008 and 13% for 2009.

Almost No Debt

In the wholesale food items industry the average debt-to-equity ratio is almost 27 to 1, while Nash's ratio is a minimal 0.9.

The company also trumps its peers in return on equity, generating 12.9% compared to the average of 10.7%.

Nash is the top ranked company in the industry, which ranks 22nd out of 217.

The Chart

Shares of NAFC spiked of off its bullish trend line after the third-quarter earnings announcement. The stock is now trading just below the 52-week high of $47.63 set in late September. Take a look at the chart below.