I found a way to access Bloomberg’s no.1 competitor for 90% less. Here’s how →
Today’s business is a small Japanese micro-cap with roughly £250m in annual revenue.
I say small because the market cap is the equivalent of just £50m today.
On paper it looks pretty boring, and, quite frankly, at risk from the AI boom.
But when I looked closer it became significantly more interesting.
In fact, the more I looked, the more interesting it became.
Here are the valuation ratios:
TBV = 1.0
EV/FCF = 2.8
P/FCF = 5.9
This means we pay for the assets, which are mostly cash, invoices and buildings, and get the operating business for basically nothing.
And the operating business here is actually quite nice, for a few reasons.
First, it’s actually a durable beneficiary of the AI boom rather than a victim.
Second, it’s growing and healthy rather than stagnant or declining.
Finally, if you bought it today’s price you’d have your money back in under three years (it’s been running for 44 years).
There are some quirks to it, of course.
It’s Japanese for a start, and the register isn’t open to an activist.
However, this is mitigated by the fact that the guys running it have most of the wealth tied up in equity.
In other words, it’s strongly in their interest for the value of the business to increase over time.
And they don’t have enough votes to perform an egregious squeeze out at todays absurd price.
Let’s take a look...