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.

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