tag:blogger.com,1999:blog-2149523431587168680.post1760193788287584259..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: Three Japanese net-net's comparedNate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-2149523431587168680.post-64653054362443413562012-09-09T05:23:09.811-04:002012-09-09T05:23:09.811-04:00Great blog, I am very excitedGreat blog, I am very excitedAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-58028395362324391712012-04-04T12:47:40.127-04:002012-04-04T12:47:40.127-04:00thanks for the quick reply.thanks for the quick reply.O-tonehttps://www.blogger.com/profile/14922301157900495819noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-76986611738997418592012-04-04T11:56:39.231-04:002012-04-04T11:56:39.231-04:00Thanks for the comment:
1) I always add marketabl...Thanks for the comment:<br /><br />1) I always add marketable securities into current assets due to the liquidity and the fact the company could unload them without affecting operations. Since this is liquidation value I think it's appropriate considering you'd probably get close to the holding value in a sale.<br />2) I used the number of shares that MSN had, which was 27 million. So it looks like I split the difference between 26.6 and 28.8!<br /><br />It's good to see the company buying back shares, especially since they're so undervalued.<br /><br />NateNate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-26090605070866960162012-04-04T11:54:16.445-04:002012-04-04T11:54:16.445-04:00Bingo! The key is there is an operating business p...Bingo! The key is there is an operating business plus the extra cash and securities. Value both separately and you have a potentially very profitable situation.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-50776330756833468252012-04-04T11:53:07.927-04:002012-04-04T11:53:07.927-04:00Hi Nate,
it's me again.
I've got two que...Hi Nate,<br /><br />it's me again. <br />I've got two questions concerning your ryoyo numbers.<br /><br />1)you obiously added Ryoyo's longterm investments in the marketable securities numbers. Is that legitimate? I know that usually they are liquid, easily sellable and mostly marked to market on the books. <br /><br />2.) concerning ryoyo's outstanding shares. Ryoyo bought back quite a lot of shares and immediatly canceled them in the end of 2011. As of the financial review of 2012 outstanding shares are now 26,6. Is that the number you took?<br />Because I first used 28,8 Mio as stated at businessweek. I correcte it now to 26,6 and for sure it makes a hack of a difference.<br /><br />GreetingsO-tonehttps://www.blogger.com/profile/14922301157900495819noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-62037078717233002282012-04-01T18:04:27.573-04:002012-04-01T18:04:27.573-04:00Ok,
Or is the idea the following (had a kind of &...Ok,<br /><br />Or is the idea the following (had a kind of "heureka moment")?<br /><br />Cash+investments not needed in operations are 27 572 million yens (according to my estimate) equivalent to 925 yen/share. Company could share that amount of money to equity holders without any effect to operations.<br /><br />Last closing share price 942 yens indicates that investor would get the operations for 17 yens/share. Earnings per share was 33 yens last year which makes tidy 0.5 P/E for operations.<br /><br />Sounds decent for profit making operations...Epanoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-20308887865802309472012-04-01T17:25:25.536-04:002012-04-01T17:25:25.536-04:00Hello,
I did a quick valuation excersie with Ryo...Hello, <br /><br />I did a quick valuation excersie with Ryoyo with EVA-model (or residual earnings if you are familiar with Penmans valuation text book). <br /><br />Results (mil. yens):<br /><br />Assets in operations (ex. some cash+investments):<br />43 026<br /><br />Liabilities:<br />8 437<br /><br />Net assets used in operations:<br />34 589<br /><br />Income from opertions(excluding random and non-operating entries):<br />808<br /><br />RNOA (return on net assets=ROI=return on invested capital):<br />2.3 %<br /><br />If your required returns for operations are about 10 %, this company is clearly destroying value (EVA about -3000 in a year).<br /><br />According to the EVA model the resultin value for operations would be about 5 000. Given that ther is net investment of 34 589 in operations this is not very good results.<br /><br />If you add the extra cash and investments (27 572), the resulting equity value is about 33 000 which makes equivalent of about 1000 yens per share.<br /><br />It seems to me that if the company continues as going concern the stock is roughly correctly valued.<br /><br />If the company would quit its operations now, it would be clearly more valuable (say twice).<br /><br />So my question is, as I have no background in this "net-net" investing and only recently have got known to it from this blog on one other (Geof), how do you expect unlock the value from this?<br /><br />Company's history tells that the operations have been in same condition for years and there is no indication of any improvement (at least after few hours of research), stock price has been basicly at the same level for years too, and certainly it seems that the company is not liquadting either.<br /><br />-Epa<br /><br />ps. Keep up the good work. It is providing good information from net-net investing which I'm not very familiar with.<br /><br />(ps2. Sorry for my english too, I'm from Finland :)Epanoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-56041763857842587622012-04-01T15:36:01.210-04:002012-04-01T15:36:01.210-04:00Epa,
Thanks for the comment. I have one post on ...Epa,<br /><br />Thanks for the comment. I have one post on a Nordic net-net Rella Holdings: http://www.oddballstocks.com/2012/01/rella-holdings-profitable-company.html<br /><br />I haven't looked up there much but I'm interested in that market for sure. The Nordic countries seem to have avoided the worst from the recent crises.<br /><br />I think there's a lot of value in Japan right now, but yes there are some issues you'd need to understand at first. My search for cheap companies had me leaving my home market as well (the US), there just aren't as many net-net's in the US as there are worldwide.<br /><br />NateNate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-70317377449955300572012-04-01T14:57:20.548-04:002012-04-01T14:57:20.548-04:00Hello,
I found your blog recently by random and h...Hello,<br /><br />I found your blog recently by random and have been browsing it since - certainly good stuff. <br /><br />Personally I'm have been looking "net-nets" from the Nordic market (Denmark, Sweden, Norway, Finland) latelly but with thin results. Few of them here and there but, according to my analysis, mostly cash burners. <br /><br />Maybe I should widen my research to other markets too, like Japan. Worried about the cultural, informational and distance issues, though.<br /><br />Anyway greetings from Finland!<br />-EpaEpanoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-34730075722808146532012-03-31T15:39:50.115-04:002012-03-31T15:39:50.115-04:00Well, your English is great, very readable. I'...Well, your English is great, very readable. I'm always amazed at the ability people have in languages other than their primary one, something I'd love to develop someday.<br /><br />Thanks for the compliments on the blog, it's really cool to hear that my site was the inspiration for yours. Keep up the great work, I've found writing to be a great way to think through ideas.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-6023105448140413802012-03-31T15:33:06.894-04:002012-03-31T15:33:06.894-04:00Thanks. I really find it tough to write in english...Thanks. I really find it tough to write in english though. Have been following your blog for a while and it encouraged me to write my investment<br />ideas down. Good job you are doing.O-tonehttps://www.blogger.com/profile/14922301157900495819noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-29381951997699649862012-03-31T15:29:09.454-04:002012-03-31T15:29:09.454-04:00Made a mistake in the liquidation value. Corrected...Made a mistake in the liquidation value. Corrected it.O-tonehttps://www.blogger.com/profile/14922301157900495819noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-24640594400289300102012-03-31T15:24:02.759-04:002012-03-31T15:24:02.759-04:00I liked your post about Ryoyo. I think any invest...I liked your post about Ryoyo. I think any investor will do fine in these Japanese net-net's as long as they have a decent margin of safety and the company is profitable.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-68108480817192932162012-03-31T14:56:33.420-04:002012-03-31T14:56:33.420-04:00That`s funny. Just finished my analysis of ryoyo w...That`s funny. Just finished my analysis of ryoyo without having seen yours.<br />I mentioned the stock before on your ryoden post.<br />I ended up with slightly different metrics though.<br /><br />http://undervaluedjapan.blogspot.de/O-tonehttps://www.blogger.com/profile/14922301157900495819noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-46481994704892149312012-03-30T17:03:48.528-04:002012-03-30T17:03:48.528-04:00I would tend to agree with the comment below that ...I would tend to agree with the comment below that one should not use a broad brush when examining Japan's macro or demographic situation. However, I still think this is one country where one would want to be especially selective on stocks and definitely not use an index fund. Finding those that are perhaps more focused on the domestic market then exports and serve a certain niche of the Japanese population would be key.agricultural investmentshttp://www.greenworldbvi.com/alternative-investments-options/agricultural-farmland/noreply@blogger.com