The Hennessy Japan Small Cap Fund (Trades, Portfolio) looks for long-term capital appreciation, typically by investing four-fifths of its assets in smaller Japanese companies. Its approach yielded annual returns in double digits in 2012 and 2013 and even produced a return of nearly 9% in the often-unstable year of 2014.
While the Fund added more than a dozen new stakes to its portfolio in the quarter ended July 31, its most noteworthy transaction was the sale of its 92,100-share stake in Sankyo Seiko Co. Ltd. (TSE:8018, Financial), a Japanese apparel and accessories company, for an average price of ¥505.52 (about $4.21 in U.S. currency) per share. The sale had a -2.79% impact on the Fund’s portfolio.
Sankyo Seiko has a market cap of $21 billion and an enterprise value of $23.37 billion. It has a P/E of 6.8, a P/B of 0.6 and a P/S of 0.6.
The Fund’s most significant reduction was its sale of 28,900 shares (more than three-quarters of its stake) in Press Kogyo Co. Ltd. (TSE:7246, Financial), a Japanese supplier of parts for automobiles and construction equipment, for an average price of ¥545.52 (approximately $4.55 in American money) per share. The deal had a -0.9% impact on the Fund’s portfolio.
Press Kogyo has a market cap of $49.43 billion and an enterprise value of $75.21 billion. It has a P/E of 7.8, a P/B of 0.7 and a P/S of 0.2.
The Fund added 30,200 shares to its existing stake in Nihon Unisys Ltd. (TSE:8056, Financial), a Japanese provider of information technology solutions, for an average price of ¥1229.34 (roughly $10.25 in U.S. dollars) per share. The transaction had a 1.48% impact on the Fund’s portfolio.
Nihon Unisys has a market cap of $115.95 billion and an enterprise value of $126.74 billion. It has a P/E of 15.3, a P/B of 1.5 and a P/S of 0.4.
The Fund acquired 163,000 shares of Sinfonia Technology Co. Ltd. (TSE:6507, Financial), a Japanese technology company, for an average price of ¥238.46 (about $1.99 in American currency) per share. The purchase had a 1.31% impact on the Fund’s portfolio.
Sinfonia Technology has a market cap of $26.17 billion and an enterprise value of $50.49 billion. It has a P/E of 11.9, a P/B of 0.9 and a P/S of 0.3.
The Fund bought 14,900 shares of Starts Corp. Inc. (TSE:8850, Financial), a Japanese real estate company, for an average price of ¥1952.51 (approximately $16.28 in U.S. money) per share. The deal had a 1.17% impact on the Fund’s portfolio.
Starts Corp. has a market cap of $97.27 billion and an enterprise value of $130.68 billion. It has a P/E of 10.6, a P/B of 1.8 and a P/S of 0.6.
The Fund purchased 12,900 shares of Paltac Corp. (TSE:8283), a Japanese pharmaceutical company, for an average price of ¥2081.31 (roughly $17.35 in American dollars) per share. The acquisition had a 1.15% impact on the Fund’s portfolio.
Paltac has a market cap of $136.95 billion and an enterprise value of $158.79 billion. It has a P/E of 12.0, a P/B of 0.9 and a P/S of 0.2.
The Fund bought 18,600 shares of Toppan Forms Co. Ltd. (TSE:7862), a Japanese information solutions company, for an average price of ¥1648.67 (about $13.74 in U.S. currency) per share. The deal had a 1.15% impact on the Fund’s portfolio.
Toppan Forms has a market cap of $157.17 billion and an enterprise value of $106.38 billion. It has a P/E of 19.2, a P/B of 1.0 and a P/S of 0.6.
The Fund added 35,000 shares to its stake in Sanyo Denki Co. Ltd. (TSE:6516), a distributor of cooling and power systems, for an average price of ¥978.2 (approximately $8.15 in American money) per share. The transaction had a 1.15% impact on the Fund’s portfolio.
Sanyo Denki has a market cap of $44.29 billion and an enterprise value of $39.26 billion. It has a P/E of 8.5, a P/B of 0.8 and a P/S of 0.5.
The Fund bought 14 new stakes in the quarter, the most significant acquisition being its purchase of a 118,000-share stake in Mitsui Sugar Co. Ltd. (TSE:2109), a Tokyo-based sugar company that is branching out into real estate, for an average price of ¥475.64 (roughly $3.96 in U.S. dollars) per share. The acquisition had a 2.33% impact on the Fund’s portfolio.
Mitsui Sugar has a market cap of $66.5 billion and an enterprise value of $75.17 billion. It has a P/E of 10.5, a P/B of 1.0 and a P/S of 0.7.
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