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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 a great microcap stock that I started to research last week. As I began to write my first article in months, this time on G. Willi Food International (NASDAQ:WILC), the company's corporate parent announced that 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, June 22, 2007.

Here are the 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 .

wilc five year financial summary

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.

WILC stock performance

Value scorecard

When you look at my value scorecard for WILC, you will not be overly impressed. The sections that capture my attention (Sect. A and B), however, show that WILC just missed capturing a passing grade on the revenue and income growth metrics.

More importantly, my top three reasons are still driving my decision to recommend this stock - that is, as of Friday....

wilc value scorecard

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

Disclosure: Author does not own any shares of WILC.

Source: G. Willi Food International: A Kosher Stock Pick