🎌 Stock Focus : Tensho Electric 天昇電気工業 [6776]

 

As can be seen from the above snapshots, the plastic molding & automotive component maker's financials have improved tremendously over the last 30 years [ a legacy of when the company suffered big losses in the early 1990s], with capital adequacy rising from the teen %s to 47.4% & book has soared from ¥19 to ¥618 while operating cashflow has been healthy in the mid +¥2 billion range. NTA has thus risen a third in the last 3 years after halving to the mid ¥100 range post-2008. 

The company is coming off a record ¥74.30 EPS last year, which is projected to fall 80% back to 2022 levels & revenue is 29% lower than the '08 record: this is another stock of which I don't have a thorough understanding of the business, but relying almost exclusively on technical analysis [ showing a base occurring every 2-3 years with the latest being in 2025 ], anticipate a rise sometime between this year & 2027, perhaps culminating in a peak sometime early next year!

Furthermore, the top two shareholders hold a combined 47.3% of its 17.014 million shares outstanding, the low free-float perhaps explaining why the stock multiplied nearly 7-fold between 2002 low & the 2006 peak & more than 11-fold between its 2016 low & its 2019 peak. Top holder Sanko Realty 三甲不動産 has actually acquired 10,000 shares since 30 months ago despite already holding 33.5% & there is thus a not insignificant chance of a TOB or buyout offer within the next 2-3 years.

Another stock [ coincidentally with a nearly identical NTA to Tensho ] that was bought rashly after the euphoria of my first ever takeover experience in Japan, Toshiba's buyout of Nishishiba on Nov 13th 2019, today marks its 2nd day in the black after commissions despite being firmly in the red virtually throughout the last 75 months since purchase, thanks to an incomplete averaging down last year at a 35% discount to the ill-conceived entry. The maiden entry was goaded by overconfidence in earning what was then my biggest single win of  over ¥86,000 barely 17 months after my debut in the country. On hindsight, I didn't realize fully that Aigan 愛眼 was plagued by losses for most of the previous 11 years, but was stung by my narrowly missing its ascent from  ¥214 in Aug '17 to a stratospheric ¥861 within a few months, that I was happy to buy in at a price lower than its 2012 bottom:

No dividends since then, yet the forecast improvement of a turnaround from losses in '24 to a ¥7.7 EPS this year may foreshadow a similar turnaround to a ¥9.3 EPS in '18 from a (¥20.4) EPS in '17.