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Bridgford Foods Not Only Survived Crash, but the Dough Maker Is Still on the Rise

December 06, 1987|John Charles Tighe and John Charles Tighe

Bridgford Foods' common stock collapsed with the rest of the market in mid-October. But while most other companies, including food makers, have continued to lose value since the Oct. 19 debacle, the Anaheim-based manufacturer of frozen bread dough, canned crescent rolls, snack sausages and other convenience-food products has seen the price of its shares soar.

Bridgford bottomed at $8.50 per share Oct. 22 and since then has more than doubled, closing Friday at $17.50 per share, up 75 cents for the week.

In recent weeks, the company has announced a three-for-two stock split and has unveiled several new products.

Such moves typically cause investor optimism in a company, but a quick 106% stock run-up is more often caused when a large investor is interested in taking over a company.

"Nope. That's not the case with Bridgford," said Jeff Kilpatrick, president of the brokerage firm of Newport Securities in Costa Mesa.

Kilpatrick, who has followed the company for seven years, noted that Bridgford family members own about 60% of the 1.3 million shares outstanding and that they have no intention of selling out.

"The whole family is at work for the company, and the business is as much a part of their lives as anything," Kilpatrick said.

Company chairman William Bridgford said: "We've been running our business. We haven't been selling our stock, and we're not going to."

The recent run-up is not the first time that the stock has gone nuts. Bridgford shares were selling at $5.875 at the end of 1986, then hit a record $21 on Aug. 12, 1987, before retreating.

At that time, Bridgford said he had received a "great number of calls from substantial brokers seeking to locate large quantities of the stock." But the callers did not disclose who their customers were or the reason for their interest.

Kilpatrick said investors, who have been battered in many stocks, probably have been taking note of the stability of Bridgford's business and the company's ability to steadily grow and report profit increases.

Profits for the nine months that ended July 31 were $1.2 million, contrasted with $331,459 in the year-earlier period.

Kilpatrick has recommended Bridgford stock to his conservative clients for several years, and in an interview Oct. 22, the day the stock bottomed, he said the company's stock probably would receive increased interest from investors.

But he said that because the stock is thinly traded, investors should be cautious and patient when buying shares.

For example, during several days last week, investors interested in buying the stock offered $16.75 per share, but shareholders were asking a minimum of $18.75, a sizable bid-ask price difference.

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