The stock has lagged the recent rally significantly after a downward revision in November which they blamed on the weather.
Now, I am of the mind that rather than talk about the weather one should do something about it. If that isn't possible then don't bother to talk about it at all.
I suspect nafco's problems may run a bit deeper than cloudy skies. As they expand into new territories they are bumping heads against formidable rivals such as komeri. A scan of the message boards also indicates the level of service customers receive leaves something to be desired.
Now if this is not a spectacular business, it is at least a spectacular price. Assuming he company undershoots this year's guidance and only earns 200 yen eps, it is still trading at 7.5x PE. And with a dividend payout of 36 yen or 18% of eps, the potential for an increase is formidable.
Oh, and it trades at 3x ev/ebitda.
And the founding family owns more than 20% of the stock. Say what you will about Japanese management, it is clear when the person running the company has their fortune on the line, the results are positively affected.
It may not be sexy, but considering the boom in new home ownership in japan, you could be in a lot worse stocks than a DIY and interior design company.
I will be placing my order to buy on Tuesday.
No comments:
Post a Comment