I've been an owner and fan of komehyo since around the 350 level when it was trading 6x Pe and looked like a nice sleepy value play with moderate growth prospects. The company is an operator of high end used goods shops with some prime real estate in areas like shinjuku. Walking around a shop is pretty mundane, although the inventory of Louis Vuitton handbags is truly shocking.
Recently the stock has been on fire and is on the brink of crossing the 1000 mark. January sales were strong at up 30% or so, but then again there have been some new store openings and this is aggregate rather than sss data.
I can't help but think he single biggest reason for the rerate was the ipo of rival kaitori okoku 3181 where the stock trades at 14x Pe.
I am looking to exit my position shortly once momentum looks to have run its course but will be sad to part with such a dear friend.
Given the strong slate of ipos this year there may be some fertile hunting grounds. Oisix looks interesting considering rock fields is also already a listed entity.
Wednesday, February 27, 2013
Monday, February 4, 2013
Watabe Wedding 4696
Watabe Wedding 4696
Bought at 706. Current 755. Target 1100
With the market already on a tear it seems reasonable to look into laggard value plays that would benefit from a domestic economic recovery.
Watabe Wedding presents such an interesting value opportunity.
The company is primarily engaged in arranging high-end overseas weddings for Japanese couples. Although they are also active in domestic weddings and working to expand in Asian markets such as China.
With the yen weakening so rapidly, certainly the risk is clear that the attractiveness of taking a large group of family and friends to Hawaii will wane. However, there is a reasonable argument to be made that the gearing from a boost in general confidence among the Japanese will be larger than the negative impact from the yen. Certainly the marriage market has seen a substantial shrink in the last few years along with the depressed Japanese economy.
Then there are the valuations. While a great many Japanese stocks have recovered to 1x P/B, Watabe still lingers at 0.53x. It also trades at 10-11x projected earnings for this year, although having achieved 84% of guidance in the 3Q, there is a substantial possibility of an overshoot, it would seem. Then there is the dividend, at 30 yen, the stock yields 4%. The payout has been stuck at this level for a number of years as earnings have flattened out, however once revenues start to pick up again, expect the company to start lifting payments once again.
And on cash flow, the stock trades exceedingly cheap at 2.6x EV/EBIT.
The technicals have also turned positive with the upward momentum starting to build after a significant lag vs. the overall market.
Sales Trend
OP Trend
Dividends
Valuations
Bought at 706. Current 755. Target 1100
With the market already on a tear it seems reasonable to look into laggard value plays that would benefit from a domestic economic recovery.
Watabe Wedding presents such an interesting value opportunity.
The company is primarily engaged in arranging high-end overseas weddings for Japanese couples. Although they are also active in domestic weddings and working to expand in Asian markets such as China.
With the yen weakening so rapidly, certainly the risk is clear that the attractiveness of taking a large group of family and friends to Hawaii will wane. However, there is a reasonable argument to be made that the gearing from a boost in general confidence among the Japanese will be larger than the negative impact from the yen. Certainly the marriage market has seen a substantial shrink in the last few years along with the depressed Japanese economy.
Then there are the valuations. While a great many Japanese stocks have recovered to 1x P/B, Watabe still lingers at 0.53x. It also trades at 10-11x projected earnings for this year, although having achieved 84% of guidance in the 3Q, there is a substantial possibility of an overshoot, it would seem. Then there is the dividend, at 30 yen, the stock yields 4%. The payout has been stuck at this level for a number of years as earnings have flattened out, however once revenues start to pick up again, expect the company to start lifting payments once again.
And on cash flow, the stock trades exceedingly cheap at 2.6x EV/EBIT.
The technicals have also turned positive with the upward momentum starting to build after a significant lag vs. the overall market.
Sales Trend
OP Trend
Dividends
Valuations
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