G. Willi-Food: Da or Nyet?

| About: G. Willi-Food (WILC)

Willi-Food (NASDAQ:WILC), one of Israel’s fastest growing food companies and an IsraelNewsletter favorite, announced a non-binding memorandum of understanding to buy 51% of the Russian eggs and slaughterhouse company owned by Arcadi Gaydamak (also majority owner of G.Willi), for an estimated $32.6 million. Many believe that Gaydamak wants to merge his egg and poultry business in Russia with Willi-Food, and then Willi-Food will manage the entire business.

Gaydamak is the largest supplier of eggs in Moscow, and this deal will give Willi-Food a significant market share in the Russian market. Willi-Food also intends to begin marketing kosher food products to Moscow’s Jewish community.

Since last week when I wrote that the stock had dropped to attractive levels and was a good trade, the stock has moved up about 12%. In analyzing the company most analyst focus, including my own, was always focused on its kosher food business in the U.S. This news of breaking into the Russian market, makes for an intriguing long-term investment. Now it plans on growing the business on two separate tracks, something that should propel revenues sharply higher, and change the company from a niche food company into a truly global food play.

I think that all this news adds up to the fact we can say “Dos V’danya” to these low stock prices.

Disclosure: The author’s fund is long WILC as of October 3, 2007.

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Tagged: , Food - Major Diversified
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