Sunday, June 24, 2007

G. Willi Food International - A kosher stock for your portfolio

Go figure.......As I get back in the blogging game this week, I am slapped with a reality that I was a tad bit slow on this great microcap stock that I started to research last week. As I post my first article back on G. Willi Food International (WILC), the corporate parent announces they are selling a 44.99% stake in their company to Israeli tycoon Arkady Gaydamak. This represents a +30% increase to their closing price on Friday 6/22/07.

Here are my top three reasons why I like WILC:
#1. Emerging Market stock at a decent value with some additional growth opportunities in the US.
#2. Healthy balance sheet, with management currently making strides to continue to improve that by restructuring some of the current debt.
#3. Latest cash balance of $21.7 Million, representing about $2.11 a share or ~25% of the market cap.
Company Profile: G. Willi-Food International is a kosher food importer in Israel. It has contracts with more than 100 food suppliers. Willi-Food's offerings range from canned vegetables and fruits to pickles, canned fish, selected bakery products, lemon juice, dried fruit, nuts, pasta, halva, coffee creamer, snacks, dairy products and cheese. It distributes its products to more than 1,000 customers, including network wholesalers, supermarket chains, and mini-markets.

5 Year Financial Trends: For the 5 year period of 2002 to 2006, WILC has achieved a revenue compounded growth rates of 8.8%, with a 15.4% annual growth last year. Net Income growth has stellar at a CAGR of 33.7%, going from $1.5 million in 2002 to $6.4 million in 2006 .

Stock performance: If you invested $10,000 on Jan 2nd, 2002 in WILC common stock, your portfolio balance would be worth just shy of $60,000, representing a 34.8% annual return. This i s ~7.7x higher than the S&P 500 of 4.5%. These amounts are as of close on Friday and do not account for the recent announcement.

Value scorecard: When you look at my value scorecard for WILC, you will not be overly impressed....The sections that capture my attention, WILC just missed capturing a passing grade on the revenue and income growth metrics (Sect. A and B). More importantly, my top 3 reasons are driving my decision to recommend this stock, that was as of Friday....

Additional blog postings on WILC can be found at the Israel Newsletter blog.

Disclosure: Author does not own any shares of WILC.
Company Websites
Yahoo Finance
SEC Online


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I bought this stock when it traded at just 1.50 dollars a share. They were a food product company that was undervalued.