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.

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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.

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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%.

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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.

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Quick Idea: Global Leader In Silicon Wafers And A Bunch Of Other Stuff – TYO: 4063 Shinetsu Chemicals

Thinking Points

  • Shinetsu Chemicals has healthy exposure to various industries and is an industry-leader in many areas.
  • The diversified nature of Shinetsu’s operating businesses helped weather through the 2008/2009 financial mess, though profitability briefly declined.
  • Despite a high cash position (net cash at 10% of market cap), Shinetsu delivered respectable low teen ROIC over the past couple of years.

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Quick Idea: Japan’s Leading Tankless Water Heater Company With Growth In China & USA – Rinnai (TYO: 5947)

Thinking Points

  • Rinnai (TYO: 5947) leads the Japanese water heater market with a 40% market share.
  • However, Rinnai’s Japan share is not the story. Growth outside of Japan has rapidly gained traction over the past few years – particularly in China and the US.
  • As infrastructure in ASEAN countries develop, we can expect Rinnai’s ASEAN revenues to grow as well.

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Quick Idea: Sushi Machine Maker With No Formidable Competitor – Suzumo Machinery (TYO: 6405)

Thinking Points

  • Suzumo Machinery (6405) is well established in a niche sushi machine industry, holding 90% market share globally.
  • Top-line CAGR of 8.7% in the past 9 years, with particularly strong growth in Europe and N. America.
  • Run up in stock price over the past year probably puts Suzumo at fair value today, but further reading on the sushi market is necessary in order to have an educated discussion about continued growth.

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