market folly

We're posting up notes from the 2018 London Value Investor Conference.  Next up is Mark Pearson of Arcus Investment who pitched a long of Asanuma Corp (TYO:1852).


Mark Pearson's London Value Investor Conference Presentation

Mark Pearson co-founded Arcus Investment in 1998.Value investing in Japan has under-performed for 10 years. The coming decade is likely to be exceptionally good. Value gets stored up not destroyed.  Defensive and high-quality companies are surprisingly expensive. In his long/ short fund, the gap between expensive shorts and cheap longs is the same as it was in the internet bubble of 1999/2000.

Long: Asanuma Corp (TYO: 1852)  Asanuma is an Osaka based construction company. Construction companies in Japan have been through the wringer and have begun a tentative recovery since 2010. They are still in the early stages in terms of revenue growth.  Since 2010 Asanuma’s net debt has been transformed into net cash (16bn Yen of debt in 2010 to 27bn Yen of cash today). PE 6x. There is no analyst coverage.  The construction sector has been one of the slowest to recover in Japan. New building is still at a low level but at the very least there will be maintenance and refurbishment work.


Be sure to check out the rest of the presentations from the London Value Investor Conference 2018.