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

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

Israel food. 4x excash pe and growing with buybacks