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5965.JP - Fujimak Corp


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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.

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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...

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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.

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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?

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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.

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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...

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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.

 

 

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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.

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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.

 

their sales and expenses are very very lumpy, I don't read into one years results too much. Like I said I focus on the fact that they are trying to expand into asia.... that has to be really good.

 

As a personal rule I never do banks or any such, foreign or domestic. ft.com will always allow you to look at their stock data, I thought, yes I have been blocked also from viewing their articles.

 

Interestingly, if you have a morningstar membership you can look at financials going back 10yrs, if they cover that stock.

 

But with all the foreign stocks after the initial screen I just go over the actual financials on the website, that should go back at least 5 years. And then you use the wayback machine, which may archive older financials.

 

 

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I use Morningstar too - I especially like their 'key stats' page. Sometimes FT as they seem to cover some more obscure stocks. With regards to being blocked on FT: maybe it works if you access their website through Google. Search for 'FT fujimak' and click the link. Works fine here every time. Unfortunately both sites only go back 5 years though afaik.

 

I assume you guys already know but if you use Google Chrome you can visit the Japanese site and translate the whole webpage automatically. That way you can understand some basic stuff, skim their press releases and find their filings. The PDF-files of the reports themselves you can translate using Google Translate. Works quite allright for balance sheets and simple headlines but large blocks of text are tougher to read.

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I use Morningstar too - I especially like their 'key stats' page. Sometimes FT as they seem to cover some more obscure stocks. With regards to being blocked on FT: maybe it works if you access their website through Google. Search for 'FT fujimak' and click the link. Works fine here every time. Unfortunately both sites only go back 5 years though afaik.

 

I assume you guys already know but if you use Google Chrome you can visit the Japanese site and translate the whole webpage automatically. That way you can understand some basic stuff, skim their press releases and find their filings. The PDF-files of the reports themselves you can translate using Google Translate. Works quite allright for balance sheets and simple headlines but large blocks of text are tougher to read.

 

Morningstar goes back 10 yrs if you pay.

 

Yes without google translate no way I can invest in Japanese small caps. But like you implied Japanese is a very different language from english, so the translation is pretty bad much of the time, however the upside is that Japanese companies follow a standard form for their financial reporting so it is easily to look at the key numbers.

 

google translate is much better for european companies such as in Greece

 

 

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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?

 

you have a good point, however, I like to emulate Schloss, and he owns more than a hundred securities back in the day when there was no free internet info, so he didn't have any more insight to many of his holdings than I do regarding Fujimak, don't you agree?

 

 

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If you don't have a paid account financial times only allows you to view financial info for a few hundred companies per month.  I found this out while I was trying to do a scan of all their stock listings in singapore and I got locked out.  I also use reuters but they don't have the price alerts which I like.  I guess I'll have to live with it because I am a cheap bastard and I refuse to pay for subscriptions.  At least July will soon roll around and I'll be able to finish my singapore adventure.

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If you don't have a paid account financial times only allows you to view financial info for a few hundred companies per month.  I found this out while I was trying to do a scan of all their stock listings in singapore and I got locked out.  I also use reuters but they don't have the price alerts which I like.  I guess I'll have to live with it because I am a cheap bastard and I refuse to pay for subscriptions.  At least July will soon roll around and I'll be able to finish my singapore adventure.

 

Really, well how about just creating multiple userids? How will they know? unless they your IP address?

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If you don't have a paid account financial times only allows you to view financial info for a few hundred companies per month.  I found this out while I was trying to do a scan of all their stock listings in singapore and I got locked out.  I also use reuters but they don't have the price alerts which I like.  I guess I'll have to live with it because I am a cheap bastard and I refuse to pay for subscriptions.  At least July will soon roll around and I'll be able to finish my singapore adventure.

 

Really, well how about just creating multiple userids? How will they know? unless they your IP address?

 

And IP addresses change constantly.  So, unless you have to log in to get the data, there's got to be a way around your issue.  Try using a different web browser, clearing your cookies, or using a different computer all together.  Does that work for your issue?

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By the way, I scrape data off of MSN Money, which works pretty well for Japanese stocks.  They did lose the 10 year data info though.  My local library has a 2010 version of the Japan Company Handbook, so I use that if I need to look past whatever MSN Money provides.

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I could definitely get around the block, but I think for my singapore thing I am going to wait a week and resume it.  I have plenty of other things to do anyway.  After this experience I'll probably do my future A-Z journeys without logging in and keep a list of the interesting ones somewhere outside of ft.  I will miss the price alert feature doing it this way though.

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If you don't have a paid account financial times only allows you to view financial info for a few hundred companies per month.  I found this out while I was trying to do a scan of all their stock listings in singapore and I got locked out.  I also use reuters but they don't have the price alerts which I like.  I guess I'll have to live with it because I am a cheap bastard and I refuse to pay for subscriptions.  At least July will soon roll around and I'll be able to finish my singapore adventure.

 

OK I am a cheap bastard also, the minimum subscription is $300+. But I have experimented and realized they only check your limit via IP address and cookies. So if you just take your same computer to Starbucks or McDs you should be able to access everything. Or easier yet, simply delete all your cookies.......

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So, dumb question.  Are you guys seeing five years worth of data when you log in?  I get three years of data without logging in, but would love to see five since MSN Money has some bad data for some entries.  TIA.

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So, dumb question.  Are you guys seeing five years worth of data when you log in?  I get three years of data without logging in, but would love to see five since MSN Money has some bad data for some entries.  TIA.

 

Yes 5 years for most, a minority are 3 yrs I guess cos that's all the data they have.

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  • 3 weeks later...

I've been spending some more time on this. Looks cheap indeed. Has anybody been able to read the annual report? I can translate the stuff on their homepage but I can find only the short 'Financial Results' releases there. Footnotes etc. are lacking. I can download the complete annual from Morningstar but I cannot translate that one using Chrome (it is DRM protected .. ).

 

I'm asking because the balance sheet still holds some mysteries for me. Most notaby:

 

1. There are roughly 0.6 billion JPY ST assets, 1.6 billion LT JPY assets and 1.6 billion JPY ST liabilities qualified as 'other'. No clue what these are.

2. I am wondering what the 1.1 billion JPY investment securities are. As Hielko, another forum reader, pointed out, it is relatively common in Japan to own an equity stake in your business partners. Is this what these are? And are these listed securities?

 

Any help would be appreciated. Might as well shoot IR an email in English. Let's see what happens :) .

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