Entered Renesas Easton Co Ltd (TYO:9995)

One more Japanese Net-net. Selected on quantitative basis, strong balance sheet, discount to net current assets (P/NCAV 0.62) and strong F-Score (7).

Entered at 460¥.

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Entered Chuokeizai-Sha Inc (TYO:9476)

Chuokeizai is a Japanese publishing company, focused on professional literature in business, accounting etc.  The shares are currently trading at a discount to net current asset value. On a quantitative basis the share looks ok.

Entered at 420 ¥ or P/NCAV 0.61.

 

 

 

1 year follow-up, Boom Logistics (ASX:BOL)

Time for a one year review of Boom Logistics. At the moment the share is trading at 0.1 A$, which is equal to a -23 % drop.

Boom Logistics was included in the portfolio on the assumption that Plant & Property could be treated as current assets and that the stock was a net-net in disguise. Given this assumption the share price had a big margin of safety one year ago.

The company has faced decreasing demand during the last year, primarily due to due to decreasing commodity prices. However, the company has been been able to sell down underutilized equipment and repay debt so the basic assumption has proven true.

The company is not profitable, but management seem on-top of the situation. As P/NCAV ratio is lower today and there is progress the stock will remain in the portfolio one more year.

 

FY-14 FY-15
Price 0.13 0.1
F-score 3 4
Z-score 0.1 0.1
P/NCAV*  0.57  0.52

*Includes 60% of Plant & Property

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.

Entered Coventry Group Ltd (ASX:CYG)

Entered a new Australian mining/industrial/resource net-net. Discounting an earlier dividend from the balance sheet I entered at 66 % of NCAV (ie 1.47 AUD).

As with most companies trading at big discount to net current assets Coventry has it’s share of problems. F-score is at the lower-end (4). Blanace sheet is cash rich and mangament is implementing a stragetic review. At the current brun-rate I expect the company to last quite a while, It may be a bumby ride though.