8002:TYO - Marubeni Corp

[gary17]

I am wondering if anyone has looked at companies in Japan recently and in particular Marubeni Corp. 

 

This Co is trading at about book and P/E of 6 and ROE 20%. MC of about 10B USD if I did the math right.

 

It's a trading company but seems like they are also expanding into energy.    I'm trying to read up more on this idea but if others have some notes from earlier would help.

 

Thanks.

 

http://markets.ft.com/research/Markets/Tearsheets/Financials?s=8002:TYO&subview=Overview

[watsa_is_a_randian_hero]

I've been in one of their larger competitors, Mitsui, for a while.  Multiples have been near at generational lows, albeit returns on capital have also been lower than average historical levels.

 

These are both part of the sogo shosha, a organization concept somewhat unique to japan.  Something like a logistics/trading company mixed with an i-bank mixed with a diversified pe fund.  They are trading companies, but they also provide financing and do deals for their trading partners, and they also end up taking minority positions in their trading partners.  The valuation on Mitsui is more attractive, but its ROIC are much lower right now (and it is larger).

[gfp]

I've been seeing them buy Aircastle (AYR) stock in the open market almost daily, since they took their initial 15% stake a year ago.

[Phaceliacapital]

I've been seeing them buy Aircastle (AYR) stock in the open market almost daily, since they took their initial 15% stake a year ago.

 

Yeah that's part of an agreement they have with AYR, I am not familiar with Marubeni but am familiar with AYR (or at least like to believe I am familiar with them)

[craigatk]

Have you read the story of the million dollar fraud perpetrated by people supposedly posing as Marubeni employees? Fake business cards, meetings held in Marubeni offices, official documentation on company letterhead, etc.

 

http://www.reuters.com/article/2008/03/29/us-marubeni-fraud-idUSSP27912820080329

 

Even with all their denials, it's amazing that this happened and should be a sign of caution to any investor. The Japanese trading companies are an unusual bunch of companies.

 

[gary17]

Thanks for the head up. In my mind this is no different than the banks selling subprime before the crisis - just fraud, all fraud. And any industry will have fraud. 

 

I'm excited about this trading house industry as if Japan has a real turn around these trading houses should do well. They are almost like how banks are key to an economic recovery in the west. If these trading houses have a competitive advantage and has a high probability of even just go up 20% consistently a year with limited downside, it could be a very good bet for a large sum of fund / leverage.

[dabuff]

Buffett invested along with a basket of other. Any thoughts on investing directly on TYO vs. the ADR on OTCMKTS: MARUY?