Encore Wire: Amazing Operating Cash Flow Growth

Cappuccino Finance
3.24K Followers

Summary

  • WIRE's operating cash flow exploded from $57.5 M in 2020 to $233.9 M in 2021.
  • Management is using the cash to grow market reach and reduce operating costs, which bodes well for the future.
  • The balance sheet remains very strong with $294.9 M cash and zero debt.
  • I believe WIRE still has room to run, and expects 30-50% upside from its current level.

Wire Rod

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Investment Thesis

Encore Wire (WIRE) is a low-cost manufacturer of electrical wire and cable for commercial buildings, houses, and apartments. The main customers for WIRE are wholesale electrical distributors who sell the electrical wires and other products to electrical contractors. Riding the

This article was written by

3.24K Followers
I believe in fundamental analysis and disciplined market research. I have strong quant background with a Ph.D. (Chemical Engineering, University of California, Santa Barbara) in model predictive control and an MBA (Jones School of Business, Rice University). My primary focus is to identify 1) small cap companies with strong fundamentals and growth potential, 2) large cap companies going through temporary set-backs, and 3) stable companies with solid dividend yields and growth potential.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of WIRE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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