AltayCap

Value investor. Istanbul. Nothing I post is investment advice. All my writeups are free. No paywalls.

[AltayCap @AltayCapital]

@CapitalJurassic I'm planning on shorting TTWO a couple days before GTA6 launch. I'm generally bearish most of the larger gaming companies.

https://t.co/bfN1uvfxYa

[AltayCap @AltayCapital]

Take Two (think Grand Theft Auto) has accumulated deficit of $7.3 bn. Zelnick + 1 other exec got $72.3m in 2023. Retained earnings peaked @ $2.3bn. Zelnick + the other exec were paid ~$339m since 2016, or 1/7th of the entire firm's peak cumulative profit. Good deal for them.

[AltayCap @AltayCapital]

@ThereWillBeQE @TheLongHappy @pygmy_hem I had a very small position which I sold shortly after the tob. But I usually just hold onto the shares into the TOBs and get cashed out months after delisting, as it's a free roll on possible bump.

[AltayCap @AltayCapital]

@CacheThatCheque Why don't these get deposited digitally into your brokerage ? Seems like a hassle to cash them one at a time.... I'd go crazy with my 130+ positions!

[AltayCap @AltayCapital]

@AstutexAi Obvious issues exist here too. Japan is drowning in Isekai slop, but the company chooses what to publish based on what does well on their UGC platform. Their platform is also far from market leader. Not even top 3 iirc.

[AltayCap @AltayCapital]

We are on the same page on gaming!

I don't dislike IG Port. Would love to own it at a much more reasonable valuation.

But Kadokawa is stupidly priced and ig is pricey. Have you looked at some of the smaller names like AlphaPolis (5.5x ev/ebit manga publisher)? It's controlled by founder and has history of steady execution. Mostly a manga publisher of Isekai slop. They bought Whitefox to do some vertical integration.

The only reason this is interesting is it's been steadily increasing profits and trades at 5.5x ev/ebit.

No prestige content here. It's all isekai slop! But founders firmly in control and seem to be able to execute.

[AltayCap @AltayCapital]

Yes. The only real risk is if market share falls due to competition. Sankyo took massive share from Sanyo in 2022.

I don't see them losing though. They have scale and their releases are never terrible.

Integrated resorts aren't at all the same as pachislot/pachinko, but it will surely take some business from the halls.

$200 goes very far at pachinko, but can be lost in a hand or a single slot pull in a casino. There's no parallel on how much it will impact the halls since pachinko is a pretty uniquely Japanese thing.

[AltayCap @AltayCapital]

Japan deep value getting clobbered last few days. Rough out there!

[AltayCap @AltayCapital]

@orrdavid @JapanDeepValue1 9414 is another oddball diversifier. TV broadcaster. 13x p/e net-net if we count investments. HQ in tokyo is valuable too. 12.5x management forecast p/e. 3.3% dividend. Stock barely moves at all. Flat since 2014

[AltayCap @AltayCapital]

@jfalandysz @orrdavid @JapanDeepValue1 The market in Japan today rewards cashhoarding stocks that commit to spending their cash hoard. Yes, shareholder returns are often better, but if growth opportunities exist its better than hoarding cash.

[AltayCap @AltayCapital]

@orrdavid @JapanDeepValue1 I own a basket position here. top and bottom line boosted by higher gold prices. Their inventory probably appreciated. Haven't done much work here, but I like the higher dividend (jumped from 80 to 115 and stayed flat).

[AltayCap @AltayCapital]

I've looked at all the pachi names and at these prices 6417 is the best buy even if its not the cheapest (the others are almost all awful on capital cap allocation).

The only reason this isn't a big position for me is the industry is hit driven. 6417 didn't always have the crazy good market share they have now. Their machines are fine, but competition is real. I've tried just about every single pachinko/pachislot machine last time i was in JP. It's a very competitive space!

The production value for the new Kyoraku is impressive. https://t.co/4pMZUQQ3j0

[AltayCap @AltayCapital]

@orrdavid @JapanDeepValue1 it's a payout ratio, the 7% is prob backwards looking but the dividend remains quite good. It's 80 jpy forecast for this coming year (it will get revised up if earnings beat). They pay out 40% of EPS.

The co remains very net cash heavy too.

[AltayCap @AltayCapital]

@JapanDeepValue1 @orrdavid This is true, but if Sankyo re-ups their authorization and continues buying on market, the stock chart will look eventually look much different. When buybacks take out marginal sellers, the long term shareholders remain and even a small buyback can drive up the price.

[AltayCap @AltayCapital]

@MikeFritzell Stock price if public, if private an illiquidity discount to book value (but there are ways to game this)

[AltayCap @AltayCapital]

@RocksOver Their last repurchase program ended and they haven't announced a new one last I checked.

[AltayCap @AltayCapital]

@orrdavid @JapanDeepValue1 Sankyo has been on my watchlist, it's getting very cheap. The industry is in decline but the cap allocation is good. Surprised it sold off this hard. Dividend is based on eps, but its quite high for jp.

[AltayCap @AltayCapital]

@JapanDeepValue1 Things move very slow, but the direction still seems to be correct. We still cash hoarders/obvious value traps, but plenty of companies are heading the right direction.

[AltayCap @AltayCapital]

@lingams Itochu and the trading companies in general seem like solid bets.

This is an interesting name I made into a full position recently.
https://t.co/eCD08PQtke

[Myles @finphysnerd]

One of my favourite Japanese ideas is Kitazato corp $368A. Founder led, Japanese company with a large (30% ex US) market share in IVF fertility treatment. Large tailwinds as popularity of IVF continues to grow. The co has been smashed down 25% from IPO last year. This isn't an

[AltayCap @AltayCapital]

@ragingbullcap RDI is going to zero. Negative ebitda last quarter. If they sell more real estate yes it delevers, but ebitda is negative as is.

The core biz sucks and they have no scale. Management is also totally incompetent. Delevering gives them a longer runway to keep bleeding.