Summary
- A little bit of a delay, but the payment portal, newsletter page, and newsletter sample are live now.
- One minor change: Newsletters will be issued at the end of each month.
- Enjoy!
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Why I Don’t Invest In Japanese Construction
Thinking Points
- Japanese construction companies flood value-focused quantitative screens.
- Japanese construction doesn’t necessarily transfer well in other regions.
- My avoidance of Japanese construction is simply a decision heuristic, not a suggestion that everybody should avoid Japanese construction.
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Announcement: Newsletter Launch + Content Changes
Summary
- First Kenkyo newsletter will be issued on October 16th, 2017.
- Sample newsletter issue, newsletter description page, and payment portal will go live on October 9th, 2017.
- Minor content changes coming up with newsletter launch.
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Idea: Consistent 60+% Greenblatt ROIC For… Weather Data? – Weathernews (TYO: 4825)
Thinking Points
- Weathernews is one of the world’s largest private weather data service.
- After its start in Ocean route planning, Weathernews now offers consulting and data services to airlines, railroads, TV stations, consumers, and many other areas.
- Leveraging its healthy ROIC performance, Weathernews is exploring different avenues for market and service offering expansion.
Idea: An Alternative To Activision Or Electronic Arts – Capcom (TYO: 9697)
Thinking Points
- Capcom (TYO: 9697) is just getting started with digital distribution.
- With strong Intellectual Property (IP) like Street Fighter and Resident Evil, Capcom is well grounded.
- If you missed the Activision and/or Electronic Arts digital distribution wave, you might want to consider looking at Capcom.
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Idea: 100% Payout Ratio And Still Growing? – TYO: 7865 People Co
Thinking Points
- People Co (TYO: 7865) is a toy company that consistently pays out nearly 100% of its income.
- Company strategy is similar to Apple & Keyence (TYO: 6861), focusing on design and outsourcing manufacturing.
- Explosive US growth provides larger non-Japanese revenue exposure.
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Quick Idea: 101% NCAV With 3.5+% Dividend Yield On Consistent Performance – Nihon Decoluxe (NGO: 7950)
Thinking Points
- Nihon Decoluxe’s (NGO: 7950) story is profitable, but as boring as it gets.
- Revenues have only slightly increased over the past 10 years while EBIT delivered 20% CAGR.
- At 0.37x EV/EBIT and a 3.5+% dividend yield, it’s hard to go wrong with Nihon Decoluxe.
Japan’s Leading Condom Manufacturer Protects Other Things Too – Okamoto (TYO: 5122)
Thinking Points
- Japan’s top condom maker, Okamoto (TYO: 5122) is about more than just condoms.
- Okamoto’s active share buybacks that precede Japan’s push for corporate governance reform is particularly encouraging.
- Thanks in part to the buybacks, per share metrics look appealing with 10-year revenue CAGR of 3% and EBIT CAGR of 20%.
Quick Idea: 19% EBIT CAGR Over 9 Years – Morningstar Japan (TYO: 4765)
Thinking Points
- Morningstar has a long lost cousin in Japan – Morningstar Japan (TYO: 4765)
- This cousin has performed quite well over the last 9 years with an EBIT CAGR of 19%
- Business performance is stellar on a Greenblatt ROIC basis, and current dividend yield is 2.5%
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Quick Idea: Japan’s Blue Apron Making Moves To Corner The Market – Oisix Daichi (TYO: 3182)
Thinking Points
- Oisix Daichi (TYO: 3182) holds a 30% share in a highly niche-y organic vegetable delivery industry in Japan.
- The company is the result of a recent merger between Oisix and Daichi, the #2 and #3 players in the organic vegetable delivery industry.
- With large companies entering the market, competitive pressures are on the rise. The CEO, however, thinks this is a good thing.