Encore Wire: Amazing Operating Cash Flow Growth

Dec. 14, 2021 2:35 PM ETEncore Wire Corporation (WIRE)4 Comments
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Cappuccino Finance
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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

fmajor/E+ via Getty Images

Investment Thesis

Encore Wire (NASDAQ: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

Encore Wire cash from operations
Data by YCharts

This article was written by

Cappuccino Finance profile picture
2.94K Followers
Visit me at Cappuccino Finance, I share my top picks (Value, Growth, Dividend & Growth), market outlook, and interesting ideas from super investors, based on my 12 years of experience and knowledge in stock investment and in real estate. I, Justin J. Lee, believe in fundamental analysis and disciplined market research. I have strong quant background with a Ph.D. (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.

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.

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