Encore Wire: A Long-Term Deep Value Play

Fade The Market
3.62K Followers

Summary

  • Encore is a wire and cable manufacturing company that rallied behind the copper price hike in 2021 and garnered a 51% price return in the previous 52 weeks.
  • The company is investing in its manufacturing and operational capabilities to achieve a higher volume growth and market share to avoid overly relying on high prices.
  • It has a fortified balance sheet, great financial metrics, and is trading at a discounted price despite a share price surge.
  • I rate the stock a buy because of its great potential for capital appreciation in the next 3 to 5 years.

Copper wire cu raw industry production and heavy metallurgical

FactoryTh/iStock via Getty Images

Investment Thesis

Encore Wire Corp. (WIRE) is a low-cost electrical building wire and cable manufacturer, primarily supplying to wholesale electrical distributors. Its products are used for interior electrical wiring in commercial and industrial buildings, homes, apartments, manufactured housing, and data centers.

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3.62K Followers
"A fade is a contrarian investment strategy that involves trading against the prevailing trend."  We look at low-cap stocks that are not covered by mainstream investment firms in search of early opportunities spanning a variety of investment philosophies. The best opportunities are found when looking where others won't. Let us know if you want us to cover any specific tickers and we'll be sure to take a look! Formerly Moonshot Equity Analysis.

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.

Business relationship disclosure:This article was researched and written by Waleed M. Tariq.

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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