We scour the net for great ideas, so you don't have to
Claim this username to collect earnings from this post, and the portfolio!
Encore Wire ($WIRE) is a relatively straightforward business to understand. They make wire.
Why they are special:
1) They have specialized and they know what they're good at and they stick with it.
2) They are organized on 1 site where raw materials come in and finished products go out making Manufacturing much more efficient.
3) They continue to invest in their production capacity and expand as necessary.
4) They have no debt, allowing them to return capital to shareholders when they see fit. This comes in the form of a dividend and regular buybacks. I do wish their dividend was growing and actually meaningful but it still sends a signal. Payout ratios currently 0.39%, with a $0.02/ share quarterly dividend.
5) Nearly $15 a cash per share on their books.
6) Diluted earnings per share is about $20.50 TTM.
7) Five years the PE Ratio has been on average 16.18 however it is currently a 5.76 signaling that the market has missed this opportunity, or the Tailwind this company has in the form of infrastructure investment and home construction in the coming decade.
8) Should the multiple expand back to the 5 year average, the price per share would be around $331.69, or an upside of about 200%... Currently at about $110.00
I do have a small position in $WIRE