Focus on Smaller Cap Value Names, Altay Capital

Altay Capital

Focus on Smaller Cap Value Names

Long time value investor. Long/Short portfolio that’s always net long (between 30-80%). I have extensive experience in the video game industry as I founded a leading media company in the space, which I have since exited after an acquisition. Gaming companies only make up ~15% of my portfolio, but its a sector where I believe I have an edge. A newsletter about value investing! Mostly focus on smaller cap value names that aren't widely covered.

Equity Bottom-Up

OUG Holdings Inc. is a wholesaler which sells fish products including fresh fish, frozen seafood, and processed food products in Osaka area.   The Company has a subsidiary in Republic of Panama.  OUG Holdings also operates real estate business.

<ul><li>OUG Holdings (TYO 8041) is a vertically integrated seafood group that auctions fresh fish at major markets, runs a nationwide cold-chain for trading, processing, and delivering seafood to stores and restaurants, and farms premium buri and bluefin tuna.</li><li>Because it controls aquaculture, logistics hubs, and its own truck fleet, it moves product from port to plate faster and fresher than rivals that outsource storage and transport.</li><li>They currently have dominant market share in Osaka and are slowly expanding to Tokyo.</li></ul>

OUG Holdings (TYO 8041) is a vertically integrated seafood group that auctions fresh fish at major markets, runs a nationwide cold-chain for trading, processing, and delivering seafood to stores and restaurants, and farms premium buri and bluefin tuna.Because it controls aquaculture, logistics hubs, and its own truck fleet, it moves product from port to plate faster and fresher than rivals that outsource storage and transport.They currently have dominant market share in Osaka and are slowly expanding to Tokyo.

OUG Holdings (TYO 8041) - A 0.5x P/TBV Vertically Integrated Seafood Wholesaler in Osaka...

ASAKA INDUSTRIAL CO., LTD. manufactures material handling equipment such as sliding racks, pickers, automated warehouses, and transport systems.  The Company also produces hardware and equipment for construction and agricultural use, such as scoops, shovels, hammers, forks, and rakes.

<ul><li>Asaka Industrial Products. Check out their web store here .</li><li>Asaka Industrial is a dirt-cheap manufacturer of shovels, gardening tools, and logistics equipment.</li><li>According to its annual report, the company was “the first in Japan to produce and commercialize shovels and scoops” back in 1893.</li></ul>

Asaka Industrial Products. Check out their web store here .Asaka Industrial is a dirt-cheap manufacturer of shovels, gardening tools, and logistics equipment.According to its annual report, the company was “the first in Japan to produce and commercialize shovels and scoops” back in 1893.

Asaka Industrial (TYO 5962): A 350-Year-Old Profitable Nanocap Net-Net Trading at 0.4x P/B, 7x P...

Thematic (Sector/Industry)

<ul><li>Dynam Japan is the largest operator of Pachinko halls in Japan.</li><li>The company has been profitable for the past15 years, though profits have been in decline.</li><li>Their halls are mostly located in suburban areas with less competition, but they do have some in big cities. </li></ul>

Dynam Japan is the largest operator of Pachinko halls in Japan.The company has been profitable for the past15 years, though profits have been in decline.Their halls are mostly located in suburban areas with less competition, but they do have some in big cities. 

Updated Thoughts on Some of My Biggest Positions In The Cheap Japanese Basket and Some New Positions

Takigami Steel Construction / Equity Bottom-Up

The Takigami Steel Construction Co., Ltd. builds a variety of bridges and buildings with steel frame.  The Company manufactures steel frame used in energy and industrial plant construction such as thermal power plants.  Takigami also provides steel frame for infrastructure construction.  The Company produces rivets and nails through subsidiary.

<ul><li>Company is marginally profitable and owns a portfolio of securities (mostly public stocks) and rental real estate worth ~3x its market cap (~¥18,000 /share vs ¥6,000 stock price).</li><li>These figures assign zero value to the operating business and its fixed assets.</li><li>Activist investor is the #1 shareholder with a 17.4%. #2 shareholder owns 11% and will likely align with activist. Insiders don’t own enough to easily block future activism.</li></ul>

Company is marginally profitable and owns a portfolio of securities (mostly public stocks) and rental real estate worth ~3x its market cap (~¥18,000 /share vs ¥6,000 stock price).These figures assign zero value to the operating business and its fixed assets.Activist investor is the #1 shareholder with a 17.4%. #2 shareholder owns 11% and will likely align with activist. Insiders don’t own enough to easily block future activism.

Takigami Steel Construction (TYO 5918) - A Portfolio of Public Securities

<ul><li>Beji Sasaki is an unusual investor. He made a name for himself during the bubble economy of the 80s/90s as the ‘takeover man’ and despite not getting too much attention lately, he’s still active in the markets.</li><li>He takes stakes in public companies and aims to improve profitability and wrest control.</li><li>He’s an aggressive corporate raider looking to take control of public companies and maximize profits, a concept that’s anathema in Japan.</li></ul>

Beji Sasaki is an unusual investor. He made a name for himself during the bubble economy of the 80s/90s as the ‘takeover man’ and despite not getting too much attention lately, he’s still active in the markets.He takes stakes in public companies and aims to improve profitability and wrest control.He’s an aggressive corporate raider looking to take control of public companies and maximize profits, a concept that’s anathema in Japan.

Investing Alongside Beji Sasaki: Japan's Unconventional Corporate Raider and Value Investor