Author Topic: 5965.JP - Fujimak Corp  (Read 44972 times)

west

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5965.JP - Fujimak Corp
« on: June 19, 2014, 09:50:32 AM »
Fujimak is a kitchen equipment dealer and manufacturer based in Tokyo.  It is about 1.0x EV/EBIT, despite having an average ROIC of over 25% for the last three years, and EBIT having grown from 1,371m yen to 1,921m yen over the last three years.  This on a market cap of just 5,300m yen and an EV of about 1,700m yen.

Pro-tip: This means it earned 36% pre-tax (23.3% post) on its current market cap last year.  And this number has been increasing over time.

Potential catalysts, beyond the growth and extreme value already mentioned, include that it has been increasing its dividend by about 20%-25% every year for the last couple of years.

I'm a little nervous about the amount of recent capex (and I can't read Japanese well enough to understand what's going on), but the company otherwise looks damn cheap.

I hold a small position in them.

Be careful if you buy in.  Liquidity is very low.


west

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Re: 5965.JP - Fujimak Corp
« Reply #1 on: June 20, 2014, 08:19:19 AM »
I'll bump this one last time before accepting it's fallen into the "looked over COBF ideas" abyss.

Fujimak's gross cash balance is 17% higher than its current market cap.  This, despite having grown its operating income 300% over the last few year.  Last year its operating income was higher than its current enterprise value.

Looks pretty cheap to me...

randomep

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Re: 5965.JP - Fujimak Corp
« Reply #2 on: June 21, 2014, 10:14:22 PM »
Fujimak is a kitchen equipment dealer and manufacturer based in Tokyo.  It is about 1.0x EV/EBIT, despite having an average ROIC of over 25% for the last three years, and EBIT having grown from 1,371m yen to 1,921m yen over the last three years.  This on a market cap of just 5,300m yen and an EV of about 1,700m yen.

Pro-tip: This means it earned 36% pre-tax (23.3% post) on its current market cap last year.  And this number has been increasing over time.

Potential catalysts, beyond the growth and extreme value already mentioned, include that it has been increasing its dividend by about 20%-25% every year for the last couple of years.

I'm a little nervous about the amount of recent capex (and I can't read Japanese well enough to understand what's going on), but the company otherwise looks damn cheap.

I hold a small position in them.

Be careful if you buy in.  Liquidity is very low.

I bought this a year ago and write about it often on my blog. Their SG&A bounces around a lot so their earnings are very bumpy and I don't think you'll get any idea why earnings is whatever it is each quarter even if you understand Japanese.

I don't think they are just sitting idle on their cash like some other japanese netnets, they have an expansion story into asia. For example they opened a branch in Vietnam.

Spekulatius

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Re: 5965.JP - Fujimak Corp
« Reply #3 on: June 22, 2014, 02:15:46 PM »
Interesting play, I will have a closer look. I have been tracking Maruzen Kitchen 5982.JP, which also operates in the commercial kitchen appliance business. It's dirt cheap as well with a decent growth record, but Fujimak looks even cheaper.

Maruzen's numbers:
http://www.maruzen-kitchen.co.jp/toushika/PDF/maruzen201402_yuuhou.pdf
To be a realist, one has to believe in miracles.

writser

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Re: 5965.JP - Fujimak Corp
« Reply #4 on: June 22, 2014, 03:08:59 PM »
Looks very interesting indeed. What I don't like about opportunities such as these is that I can do basically zero 'common sense' research, i.e. at best I can skim the the annual report, pray I understand it correctly and hope there isn't some terrible problem that I am completely missing. No clue about management, capital allocation, company history etc. Nevertheless at the current price it looks like a steal and a Japanese kitchen manufacturer sounds a lot better than a Chinese media company .. Maybe something to stuff in a net/net basket. Will try to take a more detailed look this week.

@ randomep: bovinebear?
« Last Edit: June 22, 2014, 03:11:21 PM by writser »
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matjone

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Re: 5965.JP - Fujimak Corp
« Reply #5 on: June 22, 2014, 07:28:03 PM »
 I looked into it after it was mentioned on bovine bear's blog.  The fact that I can't read the report doesn't necessarily disqualify it for me, which I know is an unbelievable statement to some.  If I remember right they warned that profits would decline significantly in 2014.
When stocks are high, money rates rising, and business prosperous, at least half a given fund should be placed in short-term bonds. - Philip Carret

west

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Re: 5965.JP - Fujimak Corp
« Reply #6 on: June 22, 2014, 10:27:44 PM »
I should clarify, I hold this as one of many in a basket of Japanese stocks.  I know close to nothing about it, qualitatively, unfortunately.  If anyone has any information, I'm all ears :)

It's definitely cheap, and a great company by almost all of the historic numbers though (low P/B, low P/E, sales growth, EPS growth, ROIC and ROIC stability...).

It's times like these (seeing where Japanese equities are ridiculously cheap, but I can't do any qualitative research) where I wish I had kept studying Japanese in school...

randomep

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Re: 5965.JP - Fujimak Corp
« Reply #7 on: June 22, 2014, 10:50:35 PM »
I looked into it after it was mentioned on bovine bear's blog.  The fact that I can't read the report doesn't necessarily disqualify it for me, which I know is an unbelievable statement to some.  If I remember right they warned that profits would decline significantly in 2014.

But they say that every year. I really take whatever they say with a grain of salt, they are always cautious about the economy or some crisis or other.  This year it is the increase in consumption tax.

I am expecting/hoping they will expand into asia...

Mind you the stock is just miserable, it has gone nowhere in a year despite impressive numbers.  Such is the alice-in-wonderland world of Japanese netnets.


randomep

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Re: 5965.JP - Fujimak Corp
« Reply #8 on: June 22, 2014, 10:51:07 PM »

matjone

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Re: 5965.JP - Fujimak Corp
« Reply #9 on: June 23, 2014, 03:46:19 PM »
One question I had when looking at them was whether the recent uptick in sales was due to something unusual or just a normal improvement as the economy picked up.

BTW, where are you guys going for financials on foreign stocks?  I was using ft.com but I've been locked out from viewing any more.  Apparently there is a limit on views per month.  Also, it would be nice to find something with 10 year financials.  MSN used to have it but they don't anymore.  Reuters has the same data as ft but no price alerts which I like to use.
When stocks are high, money rates rising, and business prosperous, at least half a given fund should be placed in short-term bonds. - Philip Carret