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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mattyice who wrote (46573)	2/14/2012 2:02:05 AM
From: Spekulatius	Respond to of 78670

re 4091.T >>Is there any concern with their very capital intensive business (capex seems really high to me) and minimal return on cash flows?<< I believe this to be well reflected in the share price. My bet is based on my assumption (based on my personal experience and watching other players in the same field) that industrial gas is a fundamentally good business, TNSC has the leading market share in Japan and some other countries and it is quite possible for TNSC to do better in terms of financial results going forward. I see a double if they do, and stagnating shares if they don't; a bet I am willing to take. I agree their debt load is substantial but their assets are like infrastructure assets, with fairly secure cash flows. This is the reason why they have a pretty good credit rating in Japan. I do not think that a sovereign debt crisis in Japan would raise TNSC cost of debt to the 8-10% range. For one thing, the market distinguishes corporate debt from sovereign debt and the other aspects is that it would probably lead to a dramatically weaker yen, which is a good thing for a company that is attached to export industries. And since I am short the yen for the amount of the stock purchase, that should work just fine in my portfolio.