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LowIQinvestor

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Posted (edited)

Kyoto Financial Group 5844.T. Small position but seems a cute way to pick up some Nintendo on the cheap plus Kyocera, Nidec etc.  A much better idea 12 months ago when it was half the price.  Still seems to cheapish at 0.7x’s book. Seems like you basically get the banking ops for free (perhaps that’s what they are worth).  Market Cap ¥824bn vs ¥1141 of net assets.

 

 

Edited by nwoodman
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On 7/9/2024 at 7:05 PM, nwoodman said:

Kyoto Financial Group 5844.T. Small position but seems a cute way to pick up some Nintendo on the cheap plus Kyocera, Nidec etc.  A much better idea 12 months ago when it was half the price.  Still seems to cheapish at 0.7x’s book. Seems like you basically get the banking ops for free (perhaps that’s what they are worth).  Market Cap ¥824bn vs ¥1141 of net assets.

 

 

Don’t think this deserves a thread so will post a summary of their latest shareholdings filing here along with the delta from 31 March 2024.  In the doc there is a link to their filings which I ran thru ChatGPT for a translation, may save someone time in the future

Kyoto Financial Group Securities Holdings.pdf

Edited by nwoodman
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I bought a basket of durables/construction related companies JCI, GGG, AOS, CARR, TT, DE, OTIS, CRH, and SSD with proceeds from a sale of JCI. My position in JCI which has appreciated in the past few months and had similar valuation to the others so I practiced a little diversification. 

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11 hours ago, nwoodman said:

Don’t think this deserves a thread so will post a summary of their latest shareholdings filing here along with the delta from 31 March 2024.  In the doc there is a link to their filings which I ran thru ChatGPT for a translation, may save someone time in the future

Kyoto Financial Group Securities Holdings.pdf 54.57 kB · 27 downloads

 

I was looking at this a few days ago, unfortunately Merrill won't let me trade it 🙄

 

The CEO doesn't seem interested in listening to the activist who wants them to sell off the stakes in other companies and do a buyback or increase the dividend to close the gap between book value and market value.  Unlocking that value will depend on how serious the Japanese government is about undoing these interlocking ownership structures (You own shares in my company, I own shares in your company and we sit on each other's boards, drink saki and vote against any minority shareholders that try to tell us we should run a company for the owners, not the management).

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18 minutes ago, Saluki said:

 

I was looking at this a few days ago, unfortunately Merrill won't let me trade it 🙄

 

The CEO doesn't seem interested in listening to the activist who wants them to sell off the stakes in other companies and do a buyback or increase the dividend to close the gap between book value and market value.  Unlocking that value will depend on how serious the Japanese government is about undoing these interlocking ownership structures (You own shares in my company, I own shares in your company and we sit on each other's boards, drink saki and vote against any minority shareholders that try to tell us we should run a company for the owners, not the management).

Funnily enough I actually side with management, they are invested in decent businesses that are keepers..  Happy to see this trade as a quasi ETF with a negative cost banking interest.  Silchester makes some good points and creates the right kind of tension to keep management focused. It all seems like a nice problem to have.  The upside here is some semblance of a banking NIM, backstopped by the securities of decent companies.
 

 I think this will give a return on and of your money but damn it was cheap 12-24 months ago.  That would have been an investment with G&D bragging rights.  Either way it’s been fun getting to know some of the many great businesses in Kyoto and gives me an excuse to go visit.

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Isn't a discount to NAV what you would expect for a holding group like this? PSH has always traded at a similar discount. 

 

I would not invest here as a discount to NAV play but if you like the stocks they are holding, it could serve as an ETF. I like the idea though, will look further into it. Curious to see if I can sell this to my wife as an excuse to visit Japan again (alone).

Edited by Paarslaars
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1 hour ago, frommi said:

added SILA to my REIT basket and increased my put position on the S&P500.

 

Sadly cats out of the bag with this one. Wish it traded lower for longer before the tender for a juicier event-driven set-up 😞

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21 hours ago, Paarslaars said:

Isn't a discount to NAV what you would expect for a holding group like this? PSH has always traded at a similar discount. 

 

I would not invest here as a discount to NAV play but if you like the stocks they are holding, it could serve as an ETF. I like the idea though, will look further into it. Curious to see if I can sell this to my wife as an excuse to visit Japan again (alone).

Absolutely, it’s a question of how much of a discount should apply.  I think the current discount offers a margin of safety.  It’s around 70% of NAV today and if you like the companies that is invested in then it seems a fair price.  One that likely does 10-12%+ returns.

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On 7/12/2024 at 9:39 AM, Saluki said:

 

I was looking at this a few days ago, unfortunately Merrill won't let me trade it 🙄

 

The CEO doesn't seem interested in listening to the activist who wants them to sell off the stakes in other companies and do a buyback or increase the dividend to close the gap between book value and market value.  Unlocking that value will depend on how serious the Japanese government is about undoing these interlocking ownership structures (You own shares in my company, I own shares in your company and we sit on each other's boards, drink saki and vote against any minority shareholders that try to tell us we should run a company for the owners, not the management).

What they really should do is sell the bank for book value and keep the shareholdings.

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13 hours ago, frommi said:

Sorry 🙂 



I'm sure we'll both make alot of money... just could have made a little more 😂 The volume increase this week and number of mentions on Twitter means this is no longer under the radar
 

Just two weeks ago, I was convinced I was the only person looking at it. But it shows there are smarter people than me all around the world always looking 🙂

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