American Italian Pasta Company (PLB)

Company

"American Italian Pasta Company is the largest producer and marketer of dry pasta in North America. The Company has four plants that are located in Excelsior Springs, Missouri; Columbia, South Carolina; Tolleson, Arizona and Verolanuova, Italy. The Company has approximately 600 employees located in the United States and Italy." (company website)

Buy

6-Apr-06. Manga! Manga! American Italian Pasta Co. has been struggling along under a great burden of debt for quite some time. In mid-March, the company announced that it had gotten a new "credit facility" (I think that means "loan") and was no longer in default on various financing arrangements. The stock shot up (see sidebar). Amazingly, the stock has been climbing gradually ever since, and the 50-day moving average has started climbing.

• Price momentum (PPO) — steady increase over two months
• Trend (ADX) — very strong
• Money flow (CMF) — steadily improving, now neutral
• Relative strength (RSI) — very strong
• Volume — huge volume after refinancing announcement

Sell

11-Apr-06. American Pasta is-a past-a al dente and turning mushy, so I decided this morning to abandon ship while there was still a small profit to be had. Since I sold, PLB is down even more to my purchase price. The uninterrupted price rises could not go on forever, and my instincts tell me this is the beginning of a rest period.