A kosher treat: Global expert looks to Israeli food supplier

Posted Mar 22nd 2007 2:22PM by Steven Halpern
Filed under: Newsletters

Food stocks have long been considered a "defensive" area, and when considering this sector investors generally turn to such well known players as Kraft or Heinz. For those who keep kosher, however, the source of products is more limited.

Indeed, I'm always intrigued when I come across a company that is a leader in a market with limited competition and limited coverage by Wall Street. In that light, the latest recommendation from Vivian Lewis -- Israel's G. Willi-Food International Ltd (NASDAQ:WILC) -- caught my attention.

The editor of Global Investing thinks now is the time for investors to stock on shares of this supplier of kosher food products. She notes that Willi-Food is a one-stop supplier: it imports, markets, and distributes more than 400 food products manufactured by some 100 suppliers throughout the world to more than 1,000 customers.

Lewis notes, "Willi-Food excels in identifying changing tastes in its markets. The company is also developing new products with higher margins."

Incidentally, the timing of her buy recommendation was not spurred on by the upcoming Passover holiday. Rather, she is reiterating a buy rating due to a reporter's error that caused a temporary decline in the stock.

She explains, "The company put out good unaudited financial results for 2006. Unfortunately, a major news agency covered the results and included an out-of-date item about WILC tapping the bond market to raise money."

She adds that the company did raise money, but had done so last September." She points out that Willi-Food ended the year with $25 million in cash. She says, "As a result of this report, the stock dropped. I quickly bought more."

Meanwhile, she adds, the company reported a 15% rise in revenues and a 44% jump in operating income in 2006. She says, "This was more than enough to whet my appetite. But the conference call got me ravenous. 2006 after-tax income (and minority interest) net income increased to 75 cents per share vs. 21 cents a share."

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free website, TheStockAdvisors.com.

Tags: g.willi-food, wilc, willi-food