I-O Data is now trading above net current assets so I decided to exit the position. The gain was about 85% in 20 months. I likely split the cash into new Japanese net-net positions.



Entered Sanshin Electronics (TYO:8150)

Japanese stocks still make out a large chunk of my net-net observation list. Once a month or so I go over the list and select the cheapest or best deal possible. This month I took a position in Sanshin Electronics. As with most Japanese stocks this one was selected on a quantitative basis. However, Sanshin does have some IR info in English.

Sanshin has two business lines. First a device distribution business and second a solution business, where the solution business deals in planning and developing IT infrastructure. The distribution business have a high turnover and slim margins. The solutions business seems to be the more profitable one.

I found a nice write-up of the company on this Swedish blog. Entered at 870¥ or P/NCAV of 0.43.


Entered Nichiwa Sangyo Co Ltd (TYO:2055)

Nichiwa Sangyo is a Japanese company manufacturing livestock feeds. Nichiwa is trading at a discount to net-current assets (P/NCAV 0.5) and has a strong balance sheet with plenty of cash. The company offers a dividend and stable share count.

As most documents are in Japanese, which I don’t understand, this is mainly a quantitative bet. I see plenty of reasons for the discount, such as poor margins and swelling working capital.

Eidai Kako CO LTD (TYO:7877)

Eidai Kako – the second Japanese manufacturing company this month. Priced at P/NCAV 0.61. Eidai Kako is in the industry of plastic resins, car mats etc. As usual a strong balance sheet and dividends.

The Japanese net-nets are now a substantial part of the portfolio, I am thinking if I should do anything about the currency exposure. I lean towards the opinion that the currency exposure is a nice diversification. I’ll probably not try any (imperfect) hedging – which as far as I know I could only do with mini-futures.