Tuesday, March 28, 2006

Nissin: Confetti Certs

Nissin Co. Ltd. (TSE Code# 8571) has broken still another record for intentional minimalization by adding a further 2-for-1 stock split to its already-prolific split history detailed in my October 2005 post entitled The Joys of Serial Splitting. As of The 28th of March, 100 shares of cuvee 1999 have financially been julienned into a whopping 35,942 bite-sized morsels. This well-suits the increasing army of day-traders in Japan who are seemingly desirous to increase their willy-size by throwing around larger and larger (if only in terms of number of shares) lines of stock.

Though Nissin has grown admirably faster than the Consumer Finance sector average, and may continue to do so in the future, it is worth pointing out it currently is sporting a split-adjusted multiple of 31x FY 2006 earnings, and 29x FY 2007 earnings which is MORE than twice the sector multiple. Reversion to the sector mean seems more or less inevitable once the obfuscation of the splits filters through and the day traders and long-margin holders puke - something that has not been lost upon Fidelity, Invesco, & Goldman Sachs, who were the three largest non-family member, transient shareholders until they dumped substantial amounts of stock during the end of Q4 2005 and beginning of Q1 2006, presumably sold to those who, with hindsight, will prove be the ones left holding the bag. Rough target price? YEN50 per mini-share, which will give it one of the lowest nominal price quotes on the TSE, an insanely large bid-offer spread (~2%), and perhaps get the Sakioka's thinking about hiring a gaggle of those famed Iranian women who spent 1979 and most of 1980 piecing together all the shredded US CIA intelligence from the ransacked Tehran embassy, to put all those diced-up share certificates back together again. In hindsight,the CIA is probably regretting not having used "The Master Blaster" shredder (the one, according to its manufacturer), that effectively "vaporizes" any and all offending materials committed to paper. I wonder if the Sakioka's will have similar regrets?

1 comment:

Martin said...

Interesting perspective on one of my so-far favorite speculative stock. Surprised that someone would actually analyse their last stock split.

Funny blog, I'll update it in my list.