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

To: AsianValueInvestor who wrote (52032)	8/8/2013 11:45:58 PM
From: Spekulatius	Respond to of 78626

Asianvalueinvestor - thanks for walking us through the valuation case for 4967.T. I think this looks moderately attractive but probably not good enough for me. I only buy Japanese stocks when they are very cheap. I also discount cash on Japanese balance sheet companies quite a bit - since most are hoarders and don't do much with it for a long time. For me, 3093.T (Treasure Factory) which has potentially a long runway through geographic expansion is a better bet and I don't have an extremely high conviction on this name either. Japanese stocks are not as extremely cheap than thy were 1-2years ago before the Abenomics bull market. at current prices, I'd rather dabble with European stocks, where I understand the culture and business environment much better, since I grew up there and the stocks are equally cheap. Welcome to this board. I very much look forward to your contributions!

To: AsianValueInvestor who wrote (52032)	8/9/2013 12:41:11 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78626

I am not going to argue with you. :) You might know the company much better than I do. If you believe it's a buy, you should invest in it. :) However, couple points before I move on: - You claim great management of the company. However, the sales have barely grown in last five years. And now they dropped - as you claim due to the sale of non-core business. IMHO, management that does not achieve growth and has to sell non-core business is not that great. And your claim to Paul Senior that they may have better use of cash than paying higher divvie is not substantiated. I don't see how they are "reinvesting in the company" and I don't see the results. Sure, perhaps they are struggling against headwinds, but I'd rather buy a company that isn't. - You claim that P/E is inflated due to some charges. However, if I look at EPS in the past years, it was lower than this year. So there is no baseline for me to see the EPS without the charges. General observation. I hate Taleb, but he got one thing right somewhat. Financial models are brittle. And people make them brittle by optimizing them. People like you - don't take offense :)) - make all these adjustments for cash, for one time charges, for amortization - and then they finally get 12PE and they say "look, it's cheap". But that's really the best case scenario, since you just removed all the negatives, all the margins of safety. For me, the margin of safety is exactly taking conservative un-adjusted numbers that include bad stuff and seeing that the company is cheap. Then it is super-cheap after adjustments. :) In fact, I am guilty of making too optimistic valuations sometimes. But I try not to do it when I notice that I am doing it. :) Good luck.