Fukuda Denshi (JP:6960) - Highly Profitable Growth Company at Bargain- Basement Price

Introduction

Fukuda Denshi is a leading Japanese medical device manufacturer. It offers a wide range of medical equipment products like, among others, defibrillators, patient monitoring, vascular screening -, ultrasound -, stress test - and respiratory systems. In addition, the company provides therapeutic instruments for sleep apnea syndrome and sells AED (automated external defibrillators).

Lately, the company has successfully expanded into the rental medical equipment for home care, including oxygen concentrator devices, which is starting to contribute significantly to the bottom line.

The Company holds high market share within Japan in several business segments that show significant growth, a duopolistic/ oligopolistic market structure and a secular tailwind due to the aging population.

The absence of promotional behavior (limited IR), low trading volume of the stock and no analyst coverage has created a stupendous value dislocation in absolute and relative terms seldom seen in my career as a security analyst and investor.

Basically, the company is a long- term compounder, trading at double liquidation value, spitting out an incredible amount of (growing) free cash- flow while investing significantly in future growth that is totally lacking attention of the Buffett style investors.

Nitto Kohki (JP:6151) - Decent Compounder Trading around Liquidation Value

Company Overview

Nitto Kohki, founded in 1956 and headquartered in Tokyo, Japan is a well established Japanese manufacturer of components, tools and machines. Nitto Kohki's products fulfill vital roles in fields ranging from applications in the construction industry, automotive industry, medical device manufacturing and high-tech engineering.

Its mainstay products are quick connecting couplings to join fluid pipes. Customers are mainly found in the field of semiconductors manufacturing and housing construction.

Products of the machine tool segment are mainly steel drilling machines and die machining tools to produce automobiles.

In the segment pumping systems, the company mainly offers linear motor driven pumps with a wide range of applications. Among others in medical equipment and for wastewater treatment systems.

The company has sales subsidiaries in the U.S, U.K, Germany, Shanghai and Australia.

Yodogawa Steel Works (JP:5451): A J- Net Beauty with Loads of Hidden Assets

Company overview

Yodogawa Steel Works, Ltd. is an independent Japanese steelmaker located in Osaka. It mainly provides surface treated steel sheet. It is particularly strong in color steel sheet.

The Company operates in four business segments. The Steel Sheets-related segment manufactures and sells coated steel sheets, galvanized steel sheets and cold-rolled steel products. The Roll segment is engaged in the manufacture and sale of steel rolls, non-ferrous rolls, etc. The grating segment is engaged in the manufacture and sale of gratings. The Real Estate segment is engaged in the leasing and sale of real estate.

Most of its products are provided to corporate customers, such as building contractors and consumer electronics maker, but the company also handles household use storerooms, carports, and photovoltaic power generation, among other things, for general consumers.

It runs plants in Osaka, Kure, Ichikawa, Fukai and Izumiotsu. It started steel sheet sales through own sales offices. It also has a large overseas plant in Taiwan. The joint venture subsidiary, which operates the Taiwanese plant, is listed on the Taiwan Stock exchange. The company also set up local firms in Taiwan and China to produce and sell surface treated steel sheet.

Just for the Record - Sell Ryoyo Electro (JP:8068)

Sold today Ryoyo Electro for 2’683 Yen per share. A stock I mentioned on my blog roughly 8 years ago at 944 yen.

By than Ryoyo was a debt- free deep value stock with enormous assets in form of cash, receivables, inventory and liquid investments that traded below its liquidation value.

The percentage gain (without dividends) is a 184 %. Including dividends received (before Taxes), which were 420 Yen per share, the percentage gain comes in at 229%.

A more detailed analysis on the rational to buy into the stock and the reason for selling out is coming up soon!

TOB Kawasumi Laboratories: The Beast That Never Really Turned into a Beauty

Introduction

With all likelihood, this is the final post on Kawasumi Laboratories, a longtime holding of mine that was mentioned on my blog two times in the past.

Friday the 31st of July Sumitomo Bakelite announced its intention to takeover Kawasumi Laboratories at a price of 1'700 Yen. An offer which would result in a performance of 318% (incl. dividends before tax) over a period of almost exactly 8 years. And my first Japanese stock where I made the serious money basically within three days.

I have not tendered my shares to Sumitome Bakelite or sold them on the market yet. Before doing so it is time to contemplate. Writing to myself a brief presentation of my initial investment case, a recap of my rather long and wearisome journey in this “deep value” sphere of stock market investment and finally, an in depth analysis of the takeover offer, reasoning if it is attractive or not and if there is any chance of a significantly bettered offer.

The Beast - Kawasumi Laboratories (JP:7703)

Company Overview

Kawasumi Laboratories Inc. engages in the development of medical devices and pharmaceuticals primarily in Japan and Thailand. Its products comprise disposable medical products and liquid pharmaceuticals used for blood purifying in minimally invasive therapies. It utilizes plastic molding and processing technologies to produce and supply various medical devices that belong to categories such as Hemodialysis, Blood Bank, Cardiovascular Systems and Infusion Therapy. It operates in two main business segments; Blood Transfusion / Vascular Access and Dialysis/ Therapeutic Apheresis. Kawasumi Laboratories Inc. was founded in 1954 and is headquartered in Tokyo, Japan.