Dear Fellow Investor
I just sent out the latest issue of the Quant Value newsletter with 3 undervalued investment ideas.
Unusual this month was that I could not find any ideas worth recommending in Europe – the first time this has happened since I started the newsletter nearly seven years ago.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
But that does not matter because I am finding too many high quality dirt cheap companies in Japan. Mainly small companies that are perfect for private investors like you and me, as they are either too small or the traded volume is too low, for large funds and hedge funds to even think of buying.
Here are the ideas…
This month – 3 interesting investment ideas
In North America, I am recommending an US based manufacturer and marketer of truck trailers. Better than expected results led to a nearly 20% increase in the share price in February so you may want wait a bit before buying as the share price may fall back slightly. In spite of this the company is still nicely undervalued trading at 15.2% EBIT/EV and a price of only 11.7 earnings.
In Asia, I am recommending two Japanese companies.
The first company makes die casting products for cars and motorcycles and is attractively priced at only 7.2 times earnings and EBIT/EV of 11.6%.
The second company makes refractory products (material that can withstand high temperatures) and is even more undervalued trading at 8 times earnings, EBIT/EV of 37.8% and EV/FCF of only 2.7 times.
Portfolio changes this month.
Europe – Sell one
Sell Highlight Communications AG (+0.7%), recommended a year ago, as it is not in the newsletter’s investment model any more.
North America – No change
No changes to the North American portfolio this month.
Asia – Sell one
Sell Yachiyo Industry Co. Ltd. (+16.2%), recommended a year ago, as it is not in the newsletter’s investment model any more.
Stop-loss portfolio changes – Sell – One
Hirakawa Hewtech Corp. +35.2%
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Wishing you profitable investing
Tim du Toit
PS Why not sign up while the ideas are still fresh, it costs less than an inexpensive lunch for two, simply click here: Quant Value join now