The Misfits: Encore Wire (WIRE)

Still Life with Copper Pot, Cheese and Eggs, Jean-Baptiste-Simeon Chardin, circa 1730-1735, oil on canvas (Maruitshuis)

As I have been collecting my thoughts on Encore Wire (NASDAQ: WIRE) over the past few weeks, I had a small challenge. What I was thinking was a carbon copy of the same arguments I made about Mueller Industries (NYSE: MLI). I’m not surprised I came to similar conclusions because they share many of the same traits.

Both are value-additive manufacturers of copper and aluminum products (Mueller in the form of copper pipes, Encore in the form of electrical wires). Neither will appear on many market screens for high margins, spectacular growth, or dirt-cheap valuations. Neither gets much attention from Wall Street (Encore has one active analyst recommendation from 2021). And yet, few investors seemed to have noticed that these companies have run laps around the broader market measures.

To avoid sounding like I’m repeating what I said about Mueller, let’s instead explore Encore Wire and a few investing themes where Encore Wire is a great lesson to heed.

Let’s dig in.

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