Friday, September 27, 2013

Solutions To Life's Problems

Teleportation. Telekinesis. Telepathy. Transmutation. A discovery to reliably reproduce any or all of the preceding would, I dareseay, cause one's stock to do a ....errrr.... ummm..... moonshot. In fact, one that would look remarkably similar to the adjacent chart. Sadly, these abilities remain consigned to the entertaining realm of Perry Rhodan (my ages-ago adolescent reading addiction).

But something has produced the rocket-fuel to propel the stock represented in the adjacent chart into a celestial orbit - something that should cause a certain amount of interest and intrigue amongst the more curious of investors, be they momentum or reversion-oriented, as well as those merely with a sense of humor.

The company is a Tokyo-listed outfit, #2453, better known as JAPAN BEST RESCUE SYSTEM LTD.  It's moniker itself begs further investigation. "Do they manufacture emergency rope ladders?", one might ask. "Fire-extinguishers"? "Utility helicopters"? No, nothing so utilitarianly-concrete. Deferring to the oracle of Bloomberg, however, I begin to imagine why investors might be so hot & heavy for its shares. According to their business description:
 "Japan Best Rescue System Co., Ltd. provides solution services for troubles in daily life"
Vague and cryptic, but brilliant. On this basis one might jump to a rapid conclusion: the increasing difficulties in the lives of the average person must translate directly into more customers and more business. Yes! That must be it. Why indeed didn't I think of it??  They must be the "Go To" guys for EVERYTHING. Eldest daughter wants to marry a Korean? Hassled by Yakuza? Black-listed from your fav hostess bar? Need a 10am tee-time this Sat at Ashinoko C.C.? Youngest son never comes out of his room because he is playing video games all day long? Heavy rain but you forgot your umbrella? Boss is continually overbearing? Japan Best Rescue System has the answer... Awesome.

 But wait! I missed the fine print. This is NOT it at all. Here, (again) according to Bloomberg: 
Its services include repair for locks, glass, and plumbing systems. The Company offers a membership to customers and provides services through a network of franchisees and co-operate shops.  
Google elucidates further on it's business as:
The Call Center segment offers key replacement services, automobile-related services and other life-related emergency services. The Membership segment offers motorcycle stolen compensation services and other daily problem solving services. The Corporation Collaboration segment offers representative call center and customer support services. The Member Store segment develops and manages stores and cooperation stores. The Small-amount and Short-term Insurance segment offers underwriting services for small-amount and short-term insurances. The Automobile Leasing segment leases automobiles. The Others segment offers support services for self-developed home security products. On February 27, 2013, it acquired a 46.2% stake of a Japan-based company. As a result, it hold a 58.6% stake in the Japan-based company up from 12.4% stake. 
Oh, ummm, yeah. It seems the founder broker down on his scooter late one night and everyone was closed, so he was stuck. As he result, he saw opportunity in his misfortune (and others' laziness) and set about to capitalize upon it. All well and good, but if it cannot teleport freight, and don't have a cure for cancer, Best Rescue must be VERY good then at providing its services or its customers must be both absolutely desperate and solvent to warrant a nearly nine-fold increase in their shares. I, myself, am unable to judge. Whatever the case, it sure looks like there was a sea-change back in April.  

Fortunately, there is a source of information: a highly reputable Sponsored By The Company Research Report. To save you the time, here are the highlights: results at all their businesses kinda suck except for the the handyman callout subscription service which is growing nicely, more than compensating for all the other crap which Net/Net in May, led to an upward revision to sales and net for end of this FY. Nothing earth-shattering. In mid-July they also announced they bot a minor stake of shares in 2482 Yume no Machi Souzou Iinkai which runs a home delivery service for sundries. I guess the business adjacenies make a nice fit: the plumber dispatched to fix your leak can bring you a pizza too. And  in Aug, they also announced a stock-split - nuclear power for small-float, un-owned  listed co.s in Japan. 

Further plumbing the depths (no pun  intended) of this paid-for-research-gem, I finally strike the gold I am looking for. They are entering the environmental clean-up business.  In February it seems, this company bought a 3rd party allocation of shares giving them majority control of a nacsent enterprise that - get this - manufactures algae that topically absorb radioactive strontium & cesium. I think the idea is that you spray their green sludge on the effected area (say the Fukushima access road), then lease their street-scrubber-vaccuum-cleaner-thingie that sucks up the sludgy (now contaminated) water which is subsequently dried out in pans leaving a green strontium-cesium residue that that can be more easily, and we are told, safely, disposed of. It is, I must admit, pretty awesomely clever.  And timely. It is, an easy "1032" on the barometric scale of Thematic investing.  And so we have the answer to why a US$30mm market cap company is now a US$280mm - an investment return that venture capitalists are undoubtedly kicking themselves for missing.

I do not pretend to know how big the strontium & cesium clean-up market is globally. I hope, for the sake of my children it is, and remains, small - not that I wish Best Rescue ill-will in their investments. I do of course have my doubts that the venture supports Best Rescue's present market cap and eye-watering annual returns.  That is neither here nor there in regards of this post. What matters (to me) is that while their core business appears squarely focused upon handy-man dispatch contracts, I am disappointed, for I am waiting to invest in THE REAL THING - the company that, genie-like, as Bloomberg relates: provides solution services for troubles in daily life.... 

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