W-D on a comeback trail?

[02roadking]

FIRST COAST TICKER: Winn-Dixie, former straggler, nabs top spot
By Mark Basch, The Times-Union

If you were an old Winn-Dixie Stores Inc. stockholder - that is, a pre-bankruptcy stockholder - you're probably not going to want to read this. It could make you sick.
Guess which Jacksonville public company was the top performing local stock in the first half of this year? Yes, it was Winn-Dixie. And it wasn't even close, even in a year where several Jacksonville companies were the object of multibillion-dollar acquisitions.
History on Wall StreetWinn-Dixie canceled its stock when it emerged from Chapter 11 bankruptcy last November and issued new stock to creditors to pay off its debts. That stock began trading in December, and it rose from $13.50 at the end of 2006 to $29.30 at Friday's close, an astounding 117 percent gain over the six-month period.
That was far better than Armor Holdings Inc.'s 58 percent rise and Florida Rock Industries Inc.'s 56 percent return in the first half of 2007. Those two companies rose because they agreed to acquisitions. Florida East Coast Industries Inc., the third company to agree to a multibillion-dollar buyout, rose 39 percent.
  Here's another interesting fact that will probably upset long-time Winn-Dixie stockholders, who lost thousands of dollars when the stock began plummeting in value a few years ago and eventually were wiped out entirely when the company canceled the stock: Winn-Dixie's first-half performance also beat every stock in the Standard & Poor's 500 index. You might recall that Winn-Dixie was the worst-performing stock of all 500 companies in the S&P index in 2003 and was the second-worst performer for most of the next year before it was dropped from the bellwether index in November 2004, three months before its Chapter 11 filing.

But the new Winn-Dixie is a different company with a more promising future than the one that went into bankruptcy in February 2005. The stock really began to take off in May after the supermarket chain reported a profit in its first full quarter after emerging from Chapter 11, and industry publication Shelby Report of the Southeast reported that Winn-Dixie is gaining market share in four states.

Karen Short of Friedman, Billings, Ramsey & Co., the only analyst currently following Winn-Dixie, last week raised her rating on the stock from "market perform" to "outperform," citing the market share gains and positive trends in the company's profit margin.

"Long term, we remain hopeful that Winn-Dixie can gain share and SG&A [expense] leverage through [store] remodels, better merchandising and improved execution at the store level," Short said in her research report.

"If the company is successful, the stock should eventually reach levels above yesterday's closing price," she said, when the stock was at $28.98.