Will lightning strike twice? ($)
A note on a micro-cap idea with a familiar story
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Today I’m sharing some thoughts on a micro-cap I came across while doing work on a company I previously wrote about. As I went on digging, I somehow managed to convince myself this might also be interesting as it rides a trend that we’ve already discussed here at Made in Japan. It’s always nice to have past material that comes in handy - so we can get some pretty interesting angles here. (If you were wondering it’s not a SaaS company this time!)
So anyhow, here are my notes. It’s tiny and illiquid so I’ll keep this short (or at least I tried to, hehehe). Worst case, consider it a good read-across/data point. :)
Here’s the teaser:
Founder led
Rides a secular tailwind
Actually uses debt! (Modestly, and I find this a positive in Japan)
Double-digits earnings growth + Potential re-rate
Conservative accounting = underlying ROIC probably much higher
P/B: <1.5x
P/E: ~7x
My expected 3-year IRR: >20%