Written by: Aaron Katsman | August 12, 2008
Believe it or not but the current turmoil taking place in South Ossetia, and the capital, Tskhinvali is impacting Israeli businessman as well. According to report in Globes, ” The former Georgian ambassador to Israel estimates that Israeli real estate, defense, and other investment in Georgia exceeds $1 billion, and that the Russia-Georgia war is putting these investments at risk.”
Tourists have started returning to Israel and companies located in the surrounding areas have begun to evacuate their employees. Israel has come under pressure over the last 24 hours to halt arms sales to Georgia. The Jpost reports that actually, Israel halted shipments of arms a couple of months ago as the government sensed that conflict was imminent. According to an Israeli defense official, the article quotes: “Several months ago, we carried out an evaluation of the situation in Georgia and realized that Georgia and Russia were on a collision course. We have good relations with both, and don’t want to back either in this conflict,” the official said. “We therefore made a decision to drastically minimize sales of weapons to Georgia.”
Israel has successfully forged very good relations with both Russia and Georgia. Let’s hope that this current conflict doesn’t change that.
Please see our Disclaimer HERE.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
Written by: Aaron Katsman | October 22, 2007
Aaron Katsman
www.IsraelNewsletter.com
I was never big on bragging, well maybe I was, just never had much of a chance, but today’s news that G. Willi Food Intl (WILC) signed a binding term sheet with the owners of a Russian dairy distributor was predicted. The distributor is a leading supplier and importer of dairy products in Russia, and together they will form a new joint company. Willi Food would hold a 51% interest in the new company. This reminds me of the Philosopher Kings classic lyrics, “I am the man, that’s what I am. I’m a straight shooter with a master plan.” Okay, to all you jokesters out there (and you know who you are) who are now going to remind me of some of my less-than-stellar analysis, give me a break and let me have my fun.
For ‘07, analysts think this distributor will sell roughly 36,000 tons of cheese products to a base of over 1,000 customers in Russia and generate an estimated $120 million in sales. According to HLB Prime Advice, a Russian appraisal company, the distributor is a leading distributor of all cheese types in Russia and the biggest supplier of hard cheeses such as Gouda and Edam to this market. I love my GOUDA cheese! Nothing like watching football with some Gouda and crackers. This follows on what I have said in the past: that G. Willi is making a big push into the Russian food market. It’s become clear that with growing wealth and more disposable income, Russian consumers have created a large demand for imported, premium products. G. Willi can help satisfy that demand with their broad selection of healthy dairy products and other foodstuff.
Mr. Zwi Williger, President and COO of Willi Food commented, “We are very excited about this transaction, which represents a bold step for Willi Food as we continue to expand our global footprint. According to market data, over 650,000 tons of cheeses are consumed in Russia each year of which roughly 50% is imported. We believe that NewCo will provide a well-developed distribution platform for Willi Food and its subsidiaries to drive market demand for dairy products in all categories including premium branded products, kosher and healthy living styled dairy products, as well as other categories.”
As I write this, my local Dolphins fan (ouch), Zack “Facebook“Miller, asks,” What’s their competitive moat?” First of all, what the heck is a Moat? Anyway, the answer lies in Arkadi Gaydamak. He owns the parent company Willi Food Investments and he is the largest egg distributor in Russia. He himself is a huge distribution channel, and with this new deal, look out. Willi will carve out nice marketshare in the Russian food market.
How is that for some Moat!
If you are looking for a small food company that’s about to explode onto the global scene, have a long look at G. Willi. The stock has taken a hit, and looks attractive as a long-term investment.
Please see our Disclaimer HERE.
Disclosure: Author has a position in WILC as of 10/22/07. Author has no holdings in any other stock mentioned.
Like what you see? Sign up to receive daily updates from IsraelNewsletter here
Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
Written by: Aaron Katsman | October 7, 2007
By Aaron Katsman
www.IsraelNewsletter.com
I have received many requests by loyal Newsletter readers, to help clarify last week’s announcement of 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.
As it was a holiday week in Israel, there were conflicting reports as to which entity was the potential buyer. G.Willi(WILC) or Willi Food Investments( the parent company which trades on the Tel-Aviv exchange). Thanks to alert reader Amit Chokshi, who was correct to note that it was indeed the Israeli company, who may do to the deal.
The question many have asked me is if there will be any impact for WILC shareholders?
I think the answer is a resounding “Yes”.
G. Willi will now enjoy a huge distribution channel in Russia for all of their food business. G. Willi had no penetration into this market and if their parent company does a deal in Russia, it will certainly help G. Willi gain a foothold there.
I actually think US investors are underestimating this potential and the stock is still trading at very attractive levels.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long WILC as of 10/07/07.
Like what you see? Sign up to receive daily updates from IsraelNewsletter here
Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
