Written by: Aaron Katsman | May 28, 2008
Aaron Katsman
IsraelNewsletter.com
The inflation bug has most of us worried. Recently in Israel the CPI was released and showed a 4.7% surge in prices. This is obviously not just a problem in Israel. Throughout the world, inflation, especially food inflation, is alive and well, and has been for quite some time. While at first glance investors might think that food stocks should benefit from higher prices, in practice they have performed poorly over the last few quarters. They have been unable to pass on their higher costs to consumers.
This is why today’s earnings report from G. Willi Food International (WILC), is interesting. For consumers, the earnings report signals more food price hikes coming down the road. For G. Willi, it means a return to strong growth.
Why?
Because commenting on the report, CEO Zwi Williger said, ” Furthermore first quarter’s results demonstrate that we are beginning to regain the momentum that had been building over the past few years as we have been able to successfully pass on some of our costs to our customers.”
The problem that has plagued food stocks of late is that they haven’t been able to pass on costs. The fact that G. Willi has started to do so, potentially could prove to be a big boost to their bottom line.
As for its report, the company showed strong revenue growth aided by recent acquisitions, like Shamir Salads, who produce healthy Mediterranean salads, like Hummous.
While the company refrained from providing guidance for the rest of the year, if we see a drop in the price of food materials, G. Willi could potentially benefit.
Disclosure: Author’s fund has a position in WILC. He has no position in any other stock mentioned as of 5/28/08.
Please see our Disclaimer HERE.
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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 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.
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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: Zack Miller | October 7, 2007
Gilat Satellite Networks (GILT) announced that its subsidiary, Spacenet, is working with Verizon (VZ) Business to deploy a custom satellite network for the US Postal Service.
…and here come the lawsuits against BigBand (BBND). BigBand had a disastrous quarter and the stock plunged over 30% in one trading day. The provider of the de facto network architecture for digital simulcast, an application that facilitates the insertion of advertising and the transmission of video in a digital format while still providing service to analog customers, blamed a variety of factors on its revenue shortfall, including increased software customization and integration, a slowdown in Telco-TV revenues, and softness in its data business. Read the press release here. IsraelNewsletter has also written recently about what we thought was going on at BigBand.
Teva (TEVA) gets FDA approval for generic Valtrex, a version of GlaxoSmitKline PLC’s herpes drug. Valtrex sold about $1.3 billion last year.
Lots of interesting stuff going on at IsraelNewsletter pick, G-Willi Foods (WILC). Read what analyst Aaron Katsman has been saying on recent M&A activity. Look for IsraelNewsletter to clear up some of the confusion surrounding the deal later this week.
Alon USA Energy (ALJ) reported minor snags at its 70k barrel/day Big Spring, TX refinery, but with no effect on production.
After gaining more than 200% in the past six months and 500% in the last 12, Ceragon Networks (CRNT) is downgraded by Collins Stewart. Read the Globes story.
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Written by: Aaron Katsman | October 3, 2007
By Aaron Katsman
www.IsraelNewsletter.com
G. Willi-Food(WILC), one of Israel’s fastest growing food companies and IsraelNewsletter favorite, has 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 their kosher food business in the U.S. This news of breaking into the Russian market, makes for an intriguing long-term investment. Now they plan on growing the business on two seperate 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.
Please see our Disclaimer HERE.
Disclosure: Author’s fund is long WILC as of 10/03/07.
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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.
