Kosher Food Boom Should Give Willi Foods a Boost

Yesterday, G. Willi-Food International (Nasdaq: WILC) chairman and operations manager Zvi Williger was interviewed by Hank Greenberg of the Street.com on his television show. You can’t really give much in the way of details in five minutes but Williger did his best. Either way, both interviewer and interviewee believe that there is a massive market for kosher food in the US. Several days earlier, Williger spoke at a conference organized by Roth Capital Partners.

Meanwhile, the company’s stock has seen some anemic volumes and it is still a long way from the high of $9 it reached at the beginning of June. Why? I believe that US investors would prefer marketing in the US to be done by a local outfit so there were some positive responses to the rumors that G. Willi-Food may acquire such a company. I believe that this will eventually happen and the stock’s current price quite definitely reflects a buying opportunity. I also have a hunch, following on from Hank Greenberg’s assertion that “companies like G. Willi-Food are supposed to make good profit during wartime because of stockpiling by consumers,” that the company will post strong third quarter results.

WILC 1-yr Chart

Published originally by Globes [online], Israel business news - www.globes.co.il © Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.

Comments

[CrossProfit_:]

If you were to base your hypothesis on 30 million Christian Americans preferring kosher food then there might be some basis for your optimism. The fact is; though the vast majority of Americans know what kosher means, still most Americans wouldn’t know how or where to look on the label. Even if we did know how to read the labels, we probably would say ‘that’s cool’ but not decide to buy this or that product because it is kosher or not.

The stockpiling suggestion is hogwash. (Hogs aren’t kosher, pun intended.) There haven’t been any signs of stockpiling in Israel, excluding a limited amount of bottled water in northern Israel and had there been stockpiling it would result in lower sales later on. I assume you are referring to Israel for there definitely has not been any stockpiling in the United States.

Willi-Food is going to have to compete on quality and price.

Disclosure: This is a personal comment by a CrossProfit analyst and may not reflect the opinion of CrossProfit.com.
www.crossprofit.com

2006 Sep 08 03:15 AM

[lee:]

I think it was mentioned in Aaron's article a few weeks back that it's not "stockpiling" but rather Israilies weren't traveling out of the country as they normally would during august, and the company's increased 3q would reflect that.

2006 Sep 08 09:41 AM