Monday, February 17, 2014

IEHC Reports Disappointing Q3

Price$ 4.50
Market Cap$ 10.36 M
P/E TTM7.7 x
Div yield0.0 %
ROE13.8 %
IEH Corp stock tanked 20% on disappointing Q3 earnings. Ouch!

The stock has been up some 100% since I bought it because earnings have doubled yoy for the last few quarters. Well that trend did not continue. In fact Q3 earnings were down to $0.08 from $0.11 from a year earlier. Revenues were up 12%, less than the earlier two quarters. Gross margin was a few percentage lower. But Q3 SG&A was $143k higher than last year, due to increased travel expenses. These three factors resulted in the drop in income.

Looking back I of course wish I had sold the stock at its all time high of $6. Now, I'll just wait for next quarter to improve and hope this quarter was just a blip.

Sunday, February 16, 2014

Riken Keiki Reports Great Q3 Earnings, Fujimak Not So Good

Riken Keiki
Price¥ 874
Market Cap¥ 20.29 B
($ 198 M USD)
P/E TTM8.2 x
Div yield1.9 %
ROE8.6 %
Riken Keiki (TSE:7734) reported earnings improved 40% for the first 9 months this year versus last year. The company makes gas detectors and related equipment for industrial use. Sales were up and cost of goods were down. This shows good management of operations.

The company's year-end earnings projection of ¥ 76 / shr did not change, but I think that is a bit conservative. Book value increased 5% over the last 9 months.

Fujimak (TSE:5965) reported disappointing earnings that caused the stock to drop 10%. Fujimak makes commercial grade kitchen equipment. The company reported earnings that came 30% lower than this point last year. I believe the report indicated that the fast food segment was a major contributor to the poor results. Overall, sales were up 10%. But high raw material costs offset the sales gains. Also, SG&A costs were significantly higher than last year. The comprehensive earnings was better at 10% lower. Like many other Japanese companies, Fujimak benefited from gains in its investment holdings in yen.

Price¥ 800 B
Market Cap¥ 5.24 B
($ 51 M USD)
P/E TTM5.1 x
Div yield2.0 %
ROE11.55 %
The company did not change its current year earnings projection of ¥ 130 which would give the company a 6.3x earnings multiple for the year. For now I am not panicking.

Thursday, February 6, 2014

Tachibana Eletech Q3 Earnings up 39%

Tachibana Eletech (TSE:8159) reported 39% increase in earnings for the first 9 months versus a year ago. Sales were up 14%. Comprehensive income was up a whopping 155% on asset gains (mostly securities). Earnings reflect operations, but comprehensive income reflect the change in book value. The book value is up 11% in the last 9 months. I bought the company for the balance sheet and earnings. The last quarter shows both are firing on all cylinders.

Price¥ 1265
Market Cap¥ 26.4B
($259M USD)
Div yield1.2%
Operationally, the company showed the most sales gains in their Factory Automation division and their Semiconductor division. These are the two largest divisions of the company. Exports are at 18% of sales, and I hope they improve that number.

This stock could easily trade at ¥ 2000. I don't know what it would take to get there, other than hostile takeover or huge share buybacks, which I feel the company won't allow. I am a little frustrated, but then again I am patient and I am not a believer in catalysts. I don't try to predict events. But I also cannot ignore the market price of this company because I am not Japanese, so I don't intend to hold Yen forever. When this does reach what I believe is my intrinsic value, I will sell and repatriate the money.