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Strategies & Market Trends : Value Investing
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To: Sergio H who wrote (45385)11/16/2011 12:32:53 PM
From: MCsweet  Read Replies (4) of 78462
 
Sergio,

WILC seems like a classic Graham stock to me. Ample cash, below book, solid earnings history. Over the past 10 years they have consistently made money, with no negative years and average earnings of 0.39 per share, resulting in a PE of 14.25 based on current and price and the 10-year average earnings. Given the high cash balance and current solid earnings, it seems like a stock both with good prospects and a good margin of safety.

The main thing that worries me is that I don't understand why it is so cheap. Usually I understand why a stock is cheap. If I don't, I worry that I am missing something important. Possible concerns on Iran-Israel conflict? I noticed they did a secondary offering just above 6 early in 2010 (that seemed pretty pointless, as they haven't spent the cash). I would think that this could leave a tax loss selling overhang in 2010, but not in 2011.

Thanks,
MC
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