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Winn-Dixie Stores (NASDAQ:WINN) has gotten so cheap lately that a suitor (either a competitor or private equity player) could conceivably acquire the company and obtain its entire investment back in two years.

The fact is, the stock is selling at a EBITDA multiple so outrageously low - two times its enterprise value of $247 million (WINN is expected to generate EBITDA of $125 million in 2011) - that it almost seems too good to be true. If you do the math, the buyout scenario equates to a staggering annual return of 50% ($125 million divided by acquisition cost of $247 million). Granted, this situation is based on the acquirer being able to buy all of WINN's shares at the current market price, which is not realistic as a buyout normally involves some sort of premium to shareholders, to entice them to sell. The point is, WINN’s low valuation is a beacon that the most savvy deal makers of Wall Street will not miss.

Bottom line: In the past, I have pinned my hopes on the establishment of a cash dividend or a stock buyback being initiated to inject life into the stock price, but it has become more and more apparent, that if this action has not occurred by now, it probably will never happen. The way I see it, either the grocery operator will get bought out at a nice premium (within the next 6 months, as high as $12) or the company will improve earnings enough in the next two to three year timeframe to command a share price near the $21 mark (equating to 14 times earnings of $1.50).

Personally, I prefer the short term approach - getting a double in six months through a buyout as opposed to waiting around three years for a possible triple.

Disclosure: Author is long WINN