Entered Nichiwa Sangyo Co Ltd (TYO:2055)

Nichiwa Sangyo is a Japanese company manufacturing livestock feeds. Nichiwa is trading at a discount to net-current assets (P/NCAV 0.5) and has a strong balance sheet with plenty of cash. The company offers a dividend and stable share count.

As most documents are in Japanese, which I don’t understand, this is mainly a quantitative bet. I see plenty of reasons for the discount, such as poor margins and swelling working capital.

Eidai Kako CO LTD (TYO:7877)

Eidai Kako – the second Japanese manufacturing company this month. Priced at P/NCAV 0.61. Eidai Kako is in the industry of plastic resins, car mats etc. As usual a strong balance sheet and dividends.

The Japanese net-nets are now a substantial part of the portfolio, I am thinking if I should do anything about the currency exposure. I lean towards the opinion that the currency exposure is a nice diversification. I’ll probably not try any (imperfect) hedging – which as far as I know I could only do with mini-futures.