G. Willi-Food International Limited (NASDAQ:WILC)

fdude71 (73.13) Submitted: 1/4/2012 4:05:38 PM : Start Price: $4.76 WILC Score: -11.57

Israel’s largest importer of kosher food, G. Willi-Food International (Nasdaq: WILC) purchases from more than 100 suppliers and distributes the items to wholesalers and supermarkets across the country. For now, all of the company’s sales are in Israel, though the company is exploring opportunities for international expansion.

G. Willi-Food is essentially a family-run business with plenty of insider ownership. Brothers Zwi and Joseph Williger serve as the chairman and CEO, respectively, and they have a large enough ownership stake to call all the shots. The corporate structure is a little complex, with Willi-Food Investments — an Israeli firm controlled by the Williger brothers — owning more than half of the outstanding shares of G. Willi-Food. I find the leaders’ communication with shareholders clear and straightforward, and I believe that they’re looking out for the interests of minority shareholders.

For a microcap company, G. Willi-Food is on sound financial footing. The company generated $11 million in free cash flow over the past 12 months, and it has $52 million cash in the bank. You’ll notice that more than half of the company’s market cap is in this cash hoard. This financial strength gives management the flexibility to even consider expanding its operations globally. If the company’s board of directors decides that plan doesn’t make sense, it’s prepared to pay out some of this cash to shareholders as a dividend.

At $7 a share, G. Willi-Food’s stock is trading only a hair above its tangible book value of $6.39, of which almost $4 is cash. On the last call, Zwi Williger said the company’s real estate is worth $30 million to $40 million, which is far in excess of the $15 million in net plant, property, and equipment on the balance sheet. This means that the stated book value understates the value of real estate in Israel that G. Willi-Food owns outright.

All told, the stock price looks to have strong backing from the company’s hard assets, creating a situation with low downside and the possibility of long-term growth potential if the company expands geographically. CT

lkingforfreedom (< 20) Submitted: 10/21/2011 3:12:41 PM : Start Price: $6.25 WILC Score: -39.09

Israel food. 4x excash pe and growing with buybacks

MJKpayday (99.69) Submitted: 5/14/2011 8:46:18 AM : Start Price: $7.73 WILC Score: -41.99

Small Israeli food distributor.
1.) Low Price to financials 1.2PB, 12PE
2.) Management owns 50% of company - I bet they care what happens
3.) Easy to understand business with a niche market and still plenty of room for growth.

*Israel is in the middle of hot geopolitical region which could adversely affect company

Nestorvestor (< 20) Submitted: 1/31/2011 6:27:44 PM : Start Price: $7.18 WILC Score: -40.76

G. Willi-Food International Ltd., together with its subsidiaries, engages in the development, manufacture, marketing, import, export, and distribution of various food products worldwide. It markets its products primarily under the brand names of Willi-Food, Shamir Salads, and Gold Frost. G. Willi-Food International offers its products to supermarket chains, mini-markets, wholesalers, manufacturers, and institutional consumers. The company was formerly known as G. Willi-Food Ltd. and changed its name to G. Willi-Food International Ltd. in June 1996. The company was founded in 1994 and is headquartered in Yavne, Israel. G. Willi-Food International Ltd. is a subsidiary of Willi-Food Investments Ltd.

Making a statement that they export etc. worldwide is a bit of an overstatement as 80% of their revenue comes from Israel and 20% from USA, everything else is peanuts compared to these. The biggest international customer they have is Arla who provides them milk products to be imported into Israel accounting for about 15% of WILC revenues.

There are a couple of reasons I like WILC. First is the niche market they are serving. They make their living selling certified kosher food. Most of this food (70%) is imported from overseas where it has been manuafactured according to all specifications and most of these products have been private labelled to carry the Willi Food logo. Willi Food also has exclusive rights to distribute some trademarks in Israel such as the Arla butters & cheeses mentioned earlier.
Niche markets allow a small company such as Willi to exploit the small portion of overall markets that has been overlooked by the big players and this leads to better margins. Willi is boasting a net margin close to 10% which is pretty darn good for a food retailer and I think at least some of this has to do with the niche strategy they have taken.

Lets take a look at the balance sheet next. Willi has a cash & securities balance of almost 50m$ compared to a market cap of ~ 100m and a current ratio of almost 5. All this cash can be explained by the fact that the managment is looking for an acquisition to strengthen its US business. Only time will tell if they will be able to make one with justifiable valuations but you have to take into account that the managment owns more than 50% so I think that the money will be put into good use via a buyback or divvy in the event that there is no good deals.

Here is an company that can keep growing at 10% per year for a valuation of 10 times forward earnings and a P/B of 1.2. They serve a niche, they have a moat (the exclusive rights) and the insiders own over 50%. Whats there not to like.

http://nestortheinvestor.blogspot.com/2011/01/g-willi-foods-imports-private-labels.html