In today’s briefing:
- Keisei Electric: Distorted Valuation Unveils Opportunity for Activist Investors
- Seino (9076) – More Seino, Seino More. Know What I Mean? Eh Eh? Seino Goes Big on Capital Policy
- Deere & Company: Healthy Demand
- Heico Corporation: Acquisition of Wencor Group & Other Drivers
- Parker-Hannifin Corporation: Aerospace Business Recovery Is A Major Highlight – Key Drivers
Keisei Electric: Distorted Valuation Unveils Opportunity for Activist Investors
- Surpassing the pre-COVID average of 49%, the NAV discount currently stands at 61%, implying potential 12% market-neutral returns in the short-term through the recovery of the core transportation business.
- Activist investor influence in distributing Keisei Electric’s ¥1,980bn Oriental Land (4661 JP) stake to existing shareholders could unleash over 150% potential upside, surpassing the earlier mentioned 12% gain.
- Thus, there is high likelihood of Keisei Electric Railway Co (9009 JP)‘s continued outperformance over Oriental Land in the medium term.
Seino (9076) – More Seino, Seino More. Know What I Mean? Eh Eh? Seino Goes Big on Capital Policy
- Three years ago, Seino Holdings (9076 JP) delivered a lot of its cash back to shareholders in a big buyback. They bought back almost 15mm shares (7.5%).
- Since then, they’ve bought another 2.5%. In February, they changed their Dividend Policy to max(2.4% DOE, 30% payout ratio). Then they set a cap and floor on the dividend.
- Four months later they have a new MTMP, and a new Dividend Policy. Simple. 4.0%+ DOE. Div +70% vs last year. Oh… and there’s an 11% buyback.
Deere & Company: Healthy Demand
- Deere managed to exceed analyst expectations in terms of revenue as well as earnings.
- Revenues and net sales were up and price realization was positive.
- Deere viewed production and precision ag net revenue to rise.
Heico Corporation: Acquisition of Wencor Group & Other Drivers
- Heico delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed an earnings beat.
- The operating income of The Flight Support Group increased, reflecting the improved gross profit margin and net sales growth.
- The improved gross margin replicates higher net sales within Heico’s Specialty Products as well as Aftermarket Replacement Parts product lines.
Parker-Hannifin Corporation: Aerospace Business Recovery Is A Major Highlight – Key Drivers
- Parker-Hannifin delivered a solid result and managed an all-around beat in the last quarter.
- Organic sales increased by roughly 12% in the quarter, extending the company’s track record of double-digit organic growth quarters.
- Given these strong results, the company anticipates 4% organic growth for the next quarter, with segment operating margins of roughly 22.6%.
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