Should Income Investors Look At Weis Markets (WMK) Stock?

Palm Valley Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of 0.79% for the quarter, outperforming its benchmark, the S&P Small Cap 600 Index which returned -32.65% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks which helped them beat the market by nearly 33 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Palm Valley Capital highlighted a few stocks and Weis Markets Inc (NYSE:WMK) is one of them. Weis Markets is a food retailer. Year-to-date, WMK stock gained 39.5% and on May 19th it had a closing price of $55.71. Here is what Palm Valley Capital said:

“Weis Markets (WMK) operates 200 grocery stores in Pennsylvania and surrounding states. The company has a very strong balance sheet with no debt and $130 million in cash and marketable securities. Weis also owns 95 of its stores, a 1.3 million square foot distribution center, an ice cream plant, and a meat processing facility. Weis provides a 3% dividend yield and has consistently generated free cash flow over the past decade.”

In Q4 2019, the number of bullish hedge fund positions on WMK stock decreased by about 25% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with WMK’s growth potential.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we asked astrophysicist Neil deGrasse Tyson about Tesla, Elon Musk, and his top stock picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.