On Oct 29th, I put my money where my mouth was by re-purchasing '23 miracle stock Daiwa Heavy 大和重工, one of a handful of equities that I managed to sell right at the very peak price of ¥2,010 on Aug 31st last year[earning 144%] & then reprised the win with a repurchase & resale of 7-month-held shares at ¥1,747, gaining another 56.5% in the process[NCK, long since delisted, was another I managed to sell at its ultimate rebound high of $2.16 in early 2000].
In mid- October, I felt a slight urge to re-enter below ¥1,100 but held back due to an excess of cautiousness ahead of the US election uncertainty, mindful of the prior months-long slow attrition that included a missed opportunity in July & a plunge of almost 30% below my 2nd re-entry on 'Black Monday', August 5th. The price popped just short of my prior sale & then gently sagged to around the ¥1,200 level before I finally heeded the inner prompting to buy, well aware of the sketchiness of its earnings record & the possibility of holding for months, maybe years. My main justification in the bullish Tuesday blog post was technical, yet even the upper trendline was drawn spot-on accurate in its forecasting a target just above ¥1,600!
At first, it immediately wilted by up to ¥100 over the next few trading days, but, after reporting a typically uninspiring set of earnings after yesterday's close, also announced a surprise takeover offer[MBO] by a company set up by the original founding family called T-One, at ¥1,620, a 41.5% premium to the closing price which was also at a 46.6% discount to its last reported book value. It's widely speculated that this attempt was to circumvent the Tokyo exchange's recent requirement for measures to bring the company's stock price up to 1X book value since its business as a iron-casting specialist in making bathtubs, outdoor cookers & manholes has no conceivable catalyst to elevate investors' interest in the stock.
And so comes to a close the 63-year trading history of a company that was founded in 1920 in Hiroshima & listed in November 1961. The buyout launched seems timed to coincide with the exact anniversary of its stockmarket debut, during which it rose to as high as ¥6,500 shortly post-listing, dropped to as low as ¥340 in Dec '64 & catapulted to a zenith of ¥15,700 during the Bubble Era. It's slightly bittersweet for me as the number of times I can profit from trading this lucky stock will be frozen permanently at THREE, which improbably occurred in the space of 15 short months: the briefest window of time in which 3 scalpings of the same company occurred out of my 66 Japanese winners thus far. By contrast, it took Katsuragawa Electric a 6-year span to score thrice & major investment bank Nomura took a few months less than that to attain the same feat! Strangely enough, this sale comes on the exact 5th Anniversary of that thrilling disposal of Nishishiba[see below] shares 19% above the eventual takeover bid!!!
Daiwa Heavy constitutes my EIGHTH Nipponese takeover play since my debut in the Tokyo Stock Exchange on July 4th 2017, with the prior ones listed below:
1. Nishishiba [taken over by #1 shareholder Toshiba in Nov '19 for a 71% premium: the most memorable because 62% of my shares exited at the 2nd consecutive stop HIGH of ¥300, just below its 2011 high of ¥311, with the buyer of those shares, anticipating a bid north of its ¥362 book value, suffering an immediate 20% loss when Toshiba's board decided within an hour of the market close to set the offer price at ¥240 !]
2. Shinnaigai [ absorbed by Shikibo via a share swap in '21]
3. Sekonic [acquired by 2nd largest shareholder TCS for a 163% return in 50 mths: Nov '21]
4. OKK, founded as Osaka Kiko [ bought by NIDEC via a share swap in '22; sold barely profitably earlier]
5. Teraoka Seisakusho [ MBO-ed in Nov '23 for a 49% return in 46 mths ]
6. Chuo Built [ bought over by Asahi Kasei at +32%, in Dec '23 after just 3 mths]
7. Soshin Electric [taken over by Taiwanese shareholder Kamaya E. in Mar '24:+38% ]
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