Emblaze LD (DI) Share Discussion Threads

[colinhy] 31/5/2014 18:18

seekingalpha.com
May. 29, 2014
G. Willi-Food: This $6 Food Stock Is A Bargain For Activist Investors

Summary
This stock is way too cheap after a disappointing earnings report. Investors appear to be overlooking a major cash horde and buyout potential.
With a cash horde that is equivalent to about half the current share price, downside risks could be limited and the company could be a takeover target.
A billionaire recently took a major stake in this company at a significant premium, and this could lead to a 100% takeover in the future.
A spokesperson for the billionaire also made comments that indicate major expansion potential into the USA, which could increase revenues and profits.
With the shares now at oversold levels, this stock appears due for a significant short-term rebound, but longer-term investors could see much more.
G. Willi-Food International Ltd. (WILC) shares recently took a hit after reporting an earnings miss. However, this stock appears too cheap to ignore, and the recent pullback is giving investors a classic "buy low" opportunity.

This company distributes its food products to over 2,000 customers, which includes wholesalers, supermarket chains, mini markets, restaurants and many others. Based in Israel, this company is one of the largest providers of Kosher foods, and it currently offers about 600 different products, which are distributed in Israel, the U.S. and Europe. These products range from pasta, dairy, specialty foods, canned goods, desserts and more.

The food business is relatively recession-proof, and it is typically very stable in terms of cash flows. This stability is why many well-known food stocks trade for above-average market premiums. For example, The Hershey Company (HSY) and the Coca Cola Company (KO) are both trading for about 20 times earnings. Some specialty food companies like Annies's, Inc. (BNNY) are trading for about 35 times earnings. This company is trading for a mere fraction of that level. When you factor in a cash horde, this company is incredibly cheap, trading at just over three times earnings.

This company has an incredibly strong balance sheet, which reduces potential risks for investors. It has roughly $43 million in cash and just around $5,000 in debt, which is nearly nothing. The cash on the balance sheet is equivalent to $3.30 on a per share basis. That means nearly half of the current share price is backed up by cold, hard cash. This indicates the stock is trading near bargain levels, and the discount to the $8.09 book value suggests the same. The huge amount of cash on the balance sheet and the lack of debt means that this company could be an attractive takeover target. It also means it is well-positioned for a management buyout or "going private" transaction. Either one of these options could become major upside catalysts, and it could very likely happen, especially with the stock trading at depressed levels.

This stock was already cheap, but after a recent earnings miss, it is even more of a bargain. This company reported that first-quarter revenues rose by 4.9% to $27.2 million, as well as earnings of 16 cents per share, which missed analyst estimates of 22 cents per share. While this was a miss, investors seem to be temporarily overlooking the fact that this stock is still a bargain. Analysts expect this company to earn 79 cents per share in 2014 and $1 per share for 2015. This means the stock is trading for just about 6.5 times forward earnings. When you back out the cash on the balance sheet of about $3.30 per share, this stock is only trading for just over 3 times earnings!




After a recent pullback, this stock is oversold and likely to rebound in the short term. The chart above shows that the Relative Strength Index, or "RSI", is now at just 28. That is clearly into oversold levels, and that means it could be due for a major rebound very soon. I strongly believe in the strategy of buying cheap stocks that reach oversold levels due to an earnings miss. I recently wrote about another stock that was a bargain and also oversold after an earnings miss. It subsequently rose from about $7.70 per share to $8.50 within days, which scored gains of about 10% for investors who bought in for short-term gains. As for the longer term, this stock could jump much more, especially if earnings improve. However, the biggest single catalyst could be a takeover situation, a management buyout or a go-private transaction, which, as suggested by another contributor in a Seeking Alpha article, could result in a potential 100% gain in the share price.

As yet another Seeking Alpha article reported a few weeks ago, a major deal was reached, whereby two founders of this company will sell their 58% stake to a company called Emblaze (OTC:BLZSF) for about $10.15 per share. The article states:

"Beneath the surface, investors will see that Emblaze Ltd. is controlled by Ukrainian businessman Alexander Granovsky, a reported billionaire with experience in food investments, who purchased a controlling stake in Emblaze last year."

With a billionaire taking a major stake in G. Willi-Food and at a significant premium, investors selling right now are probably making a huge mistake. This billionaire could be planning to buy the rest of the company next. Furthermore, if he plans to significantly expand sales into the United States, revenues and profits could rise substantially and take the share price much higher. A spokesperson for the billionaire was quoted in an article stating:

"We looked for investments in companies that have human capital and growth engines in Israel and abroad. It's not easy to find such deals, but we identified Willi-Food as a company that meets those conditions," said Yossi Schneorson, CEO of BGI and Granovsky's representative in Israel. "We think Willi-Food has the potential to expand in the United States."

Aside from major expansion potential into the USA, this company could also see growth from a number of new products. G. Willi-Food often adds new food products that could increase revenues and profits. For many companies, natural or organic foods are a major growth category. This company recently announced that it is entering the soft drink market with the launch of the "Green Cola" brand, which is a carbonated soft drink that is naturally sweetened by stevia plants. Green Cola is already selling well in other countries, probably because of the flavor and the fact that it has no preservatives and only two calories.

The potential downside risks could include some type of geopolitical issue in Israel, since a major part of its revenues are derived from that country. However, people need food, so this would probably be one of the least-affected companies in the event of something like that. Furthermore, this risk might be minimized in the future as it expands sales into the USA and other countries. With the price-to-earnings ratio at very low, bargain-like levels, and with a cash horde and nearly zero debt, the potential downside risks from these levels seem quite limited. With that being said, the potential upside is creating an excellent risk-to-reward ratio, especially as a buyout or go-private transaction (which is increasingly likely due to the cash horde) could provide gains of up to 100% or possibly more from currently depressed levels. Even without a buyout, this stock could be poised for major upside. One analyst has a $10 price target, and that implies significant upside from current levels. As the selling pressure from investors who were disappointed with the earnings report fades, I expect this stock to mount a strong comeback in the short term to about the $7-$7.25 level. That will give investors who buy now solid gains, but those who hold for the long term could get much more.

Here are some key points for G. Willi-Food International:

Current share price: $6.57
52-week range: $6.40 to $8.91
Earnings estimates for fiscal year 2014: 79 cents per share
Earnings estimates for fiscal year 2015: $1 per share
Annual dividend: n/a

[colinhy] 31/5/2014 15:09

more on Post #36869

EMBLAZE LTD.,Plaintiff,v.MICROSOFT CORPORATION,Defendant
Case No. 12-cv-05422-JST
Dated: May 30, 2014
______________________________________
JON S. TIGAR
United States District Judge

ORDER DENYING MOTION TO DISQUALIFY COUNSEL


In this action for patent infringement, Defendant Microsoft moves to disqualify the law firm of Cohen & Gresser LLP ("C&G") as counsel for Plaintiff Emblaze. Emblaze opposes the motion. For the reasons set forth below, the motion is DENIED.

[jozz] 31/5/2014 13:29

Microsoft Loses Bid To DQ Cohen & Gresser In IP Suit
A California federal judge on Friday rejected Microsoft Corp.'s bid to disqualify Cohen & Gresser LLP from representing Emblaze Ltd. in its lawsuit accusing Windows 7 of infringing a media-streaming patent, finding no evidence that Cohen knew a firm it communicated with in the litigation, Cozen O'Connor, had a conflict of interest.

[moneyman18] 31/5/2014 12:42

We are talking about a company with 130 MILLION in cash and ALL THE REST,

WATCH THIS SPACE, can they make it DISAPPEAR

[cjohn] 31/5/2014 11:54

This is a conventional statement that is made in such circumstances to cover all eventualities, as there is of course a very small chance the regulatory authorities may not give permission.

In the unlikely event they didn't, AIM membership would be sought.

In the even more extremely unlikely event the company went private, you would not lose your shares and there would be some mechanism for dealing in them.

Lastly, the statement was made previously, so it isn't new.


If this innocuous statement has caused you anxiety and you now wish to sell your shares, I'd be happy to take them off your hands. Give your e-mails and I will be in touch.

[moneyman18] 31/5/2014 01:05

30p would be better than nothing, But I think it could be nothing

[landsker] 30/5/2014 19:15

makes you wonder if they are looking for an excuse to take the company private, strange how they never mentioned any doubts about it being relisted before the vote

[adg] 30/5/2014 11:03

dont like this bit - the slimy fp's are up to something imo - hardly surprising given their background and the (excuse for a) companies history ;

"Until the Company has completed the
formal application process and satisfied the UKLA as to its eligibility, there
is no certainty that the UKLA will approve the re-listing of the Company's
shares to trading on the Standard List. In such circumstances, the Company
would cease to be listed although the board would actively explore the
possibility of moving to AIM or an alternative listing or admission venue.
"

[moneyman18] 30/5/2014 10:10

LOOKING BETTER

[moneyman18] 29/5/2014 23:59

Does anyone know when we will find out ?

[waterloo01] 29/5/2014 15:12

MM, wow that's bullish for you. lol

[moneyman18] 29/5/2014 14:37

Below 30p is more likely

[jonstheboy2] 29/5/2014 13:16

Thanks waterloo01 for your input. Any more open thoughts on opening range?

[jozz] 29/5/2014 10:44

I predict a riot.

[hotfinance14] 29/5/2014 09:03

I predict 55p per share.

[waterloo01] 28/5/2014 17:45

Jon, Essentially they have a controlling stake in Willi (know what you mean but at least it's chopped), so worth today $52m (paid a lot more only recently) plus they have a further $60m in cash in BLZ accounts. Plus an outside chance of a (large) patent claim against Apple/MS the first of which goes to trial (after 2+ years) in the next few weeks in N.California. Everything else is just history (except the massive accumulated losses against tax). So in principle.....anything south of $120m (£70m) as of today (unless someone wants the UK base and tax loss???) 65p-70p a share?

[jonstheboy2] 28/5/2014 17:17

Afternoon,

Looking at Q1 news, Willi share price currently trading @ 6.56 NIS. I understand that emblaze owns 61.65% share of willi (sounds so wrong writing about willi!). With cash leftover, thoughts on what an emblaze share equates too? We know there will be a difference between this and what people are prepared to buy in at but just trying to get my head around it. I am no expert but looking for an indicator only. All constructive thoughts welcomed. Maybe we could open up a 'virtual book' on opening price when (and if) it happens. Place your bets now............not you Eli

[waterloo01] 28/5/2014 13:34

Not such sterling results from Willi.


Profit after tax $2m for the quarter. Tight going forward so will look at cost reductions.

Looking at acquisitions with Cash.

[colinhy] 22/5/2014 22:37

10:3-00AM, Monday, Jun 30 2014

United States District Court for the Northern District of California
Magistrate Judge Paul S. Grewal


5:11-cv-01079-PSG - Emblaze Ltd. v. Apple Inc.

Jury Trial

[waterloo01] 15/5/2014 12:39

Envirovision, as I understand it the UKLA requires them to do a prospectus re the Willi deal. Finncap are on the case but will likely take a couple of weeks for them to review after it's submitted, so another 3-4 weeks wait I suspect. Post this they should still have $60m+ in cash!

[envirovision] 15/5/2014 11:54

So no reason this should not be re-listed or is there another deal/offer we dont know about ?

[waterloo01] 08/5/2014 15:11

Full transcript

[colinhy] 08/5/2014 08:55

7 May 2014

ERM advises Emblaze on the acquisition of a controlling stake in Willi-Food Investments Ltd

Epstein Rosenblum Maoz (ERM) regularly advises Emblaze and its controlling stakeholder BGI Investments (1961) Ltd on their international corporate and M&A matters, including in relation to the high-profile bid for a controlling interest in the Israeli IDB group and in respect of a transfer of the Emblaze listing from the London Stock Exchange's Premium List to the Exchange's Standard List.

[colinhy] 07/5/2014 21:37

10:00AM, Tuesday, Jun 17 2014

United States District Court for the Northern District of California
Magistrate Judge Paul S. Grewal

5:11-cv-01079-PSG - Emblaze Ltd. v. Apple Inc.

Pretrial Conference