Encore Wire: Adequate Value Despite Expected Cash Flow Declines

Alex Ponte
680 Followers

Summary

  • Encore Wire has done an exceptional job with its vertically integrated business model, expanding EPS by nearly 45% annually the last 9 years.
  • Demand for house wiring appears promising with increases in remote work and the need to increase housing supply.
  • Under a discounted cash flow model, Encore Wire appears to have an approximate 43% upside.
  • Encore represents the pinnacle of balance sheet strength with its $400 million cash balance and zero debt.

Optical fiber for very high speed internet

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Investment Thesis

Cyclical swing and increased copper prices aside, you should consider adding Encore Wire (WIRE) to your portfolio if you're a long-term value-oriented investor. To begin with, the management has done a great job in using

This article was written by

680 Followers
Alex Ponte provides extensive write-ups on stocks with a market cap of less than $10 Billion in North America and various other topics of interest.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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