| I'm still bullish on NWD as a growth stock. I picked up some more at $1.35 today.
One of the reasons for this sentiment can be found on the investor fact sheet linked from the company website. Apparently the Chinese government is attempting to privatize the food industry, thus allowing previous state-owned factories to be acquired under very favorable terms which leads to....
"In February 2006, we acquired a state-owned noodle manufacturing facility in Chengdu, Sichuan Province at net book value. This acquisition expanded our instant noodle production capacity by 30% and established our presence in western China. It also freed up the production capacity at our Shandong facilities. In April 2006, we acquired the remaining equity interest in our packaging facility at net book value from our joint venture partner (also a state-owned enterprise) and injected additional capital to expand the facility. We strongly believe that each of these acquisitions will have a positive impact on our financial performance in the coming quarters."
Quoted from an October 2006 press release.
$8,000,000 in stock-based compensations were awarded in 2006 to those who are finding these undervalued assets. That $8,000,000 is on the 2006 books and done (hopefully) and accounted for the -.10 EPS for 2006. That, coupled with the China fallout in February brought NWD down to where it's at today. However, NWD is an established processed food company, growing at a reasonable rate in a newly privatized sector of the Chinese economy.
NWD looks like a great long term investment. |