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I increased my investment in Wilmar, averaging up in the process, as it seems to fall out of favor with Mr. Market once again.
The last time I increased my investment in Wilmar was in August last year at a similar price level.
Back then, I said I was pretty happy to add to my investment at a price much lower than what Mr. Kuok paid in June in the same year.
Now, I feel the same way, especially when Wilmar has been doing share buybacks constantly even at much higher prices.
Wilmar has been undervalued for a long time and it is still deeply undervalued today.
The case for investing in Wilmar is even more compelling today especially if we believe that heightened inflation is here to stay for a longer time.
If we believe that there is going to be stagflation, then, companies like Wilmar will likely be the ones which do better as they provide essential goods and services.
If you are interested in my little ideas on Wilmar, I will provide links to my past blogs on Wilmar at the end of this blog because I am too lazy to rehash.
However, here are a couple points which I might or might not have mentioned before, off the top of my head:
1. Wilmar's subsidiary in China, Yihai Kerry Arawana Holdings (YKA) in China has a market cap that is about three times that of Wilmar's market cap in Singapore and Wilmar still holds a 90% stake in YKA.
2. Wilmar's 50% joint venture in India, Adani Wilmar Limited, has achieved similar success in its public listing as its market valuation has tripled since listing in February this year.
Wilmar is a profitable business and is reliable when it comes to paying dividends.
Wilmar paid meaningful dividends even during the COVID-19 pandemic bear market.
Wilmar can easily unlock value for shareholders by reducing its stakes in the abovementioned businesses alone.
Undervalued can remain undervalued for a long time, of course, which makes Wilmar a decent choice for investors who are pretty happy to be paid while waiting.
Investing in Wilmar today or at even lower prices, if we are lucky, is to get big chunks of good income producing businesses for free.
Whether it be stocks or socks, we like buying when they are marked down but what about having some pretty cool stuff thrown in for free with our purchase?
AK is being mental again. (TmT)
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