Free Willi? This Food Stock Looks Cheap

In the midst of the Jewish New Year and 3 week long holiday season, food has been playing an essential part in my life. Since I can’t get food out of my mind, I decided to revisit an Israeli food company that has been recently sporting a stock price which has been doing nothing but falling.

G. Willi-Food (WILC), one of Israel’s fastest growing food companies and IsraelNewsletter favorite, has been in a freefall of late and yesterday saw a closing price of $5.61. The stock is currently trading at around 18.5 times earnings and with a PEG of 0.85, the stock looks very cheap compared to competitors.

Willi Food continues to execute their business model, and drive their expansion into the US kosher food market. As I have mentioned in the past, the kosher food market is very large and growing rapidly. Look for WILC to continue to profit from this trend for years to come.

In late August the company reduced estimates, but still expects to show revenue growth of between 30-40%. This is still very strong growth and I think the stock has been unfairly punished, and trading in the $5.50-$6.00 makes for an intriguing long-term investment.

Disclosure: Author’s fund is long WILC as of 9/25/07.

Comments

[Dan Jacome:]

WILC is garbage -- forming a double top (see a multi year weekly chart) and mgmt owns over 60% of the stock = risk....best stock in the group is, we think, GMCR. The retail food sector is cooking off food inflation, but not all food stocks are created equal. Go long the bean.

2007 Sep 27 05:14 PM

[User 112432:]

how big is the US kosher market and what is its growth rate? What is driving growth?

2007 Oct 10 12:08 PM