Nisshin Group Holdings (8881) & FJ Next (8935)
Consumer Discretionary
Homebuilders may be the best free-cash cows in Japan - Mike Churchill highlights two opportunities from his Classical Insights Portfolio:
Nisshin Group Holdings: ROE is low (5%), but P/B is low too (0.37x). 15% FCF yield, 4.6% dividend yield (3x covered by FCF) and negative adjusted EV. If Japan had more lenient takeover rules, this company would be snatched up in a heartbeat.
FJ Next: Reliable business model (builds apartment buildings near subway stations in big cities) and boasts a decade-long record of sales growth (+100% since 2015). P/B 0.59x, 18% FCF yield, 4.7% dividend, the stock is trading at 5.7x earnings and also has a negative adjusted EV.
Edition: 125
- 10 December, 2021