The Matthews Japan Fund (Trades, Portfolio) added 327,800 shares in Broadleaf (TSE:3673, Financial) at an average price of 1,018 yen ($10.06 in U.S. money) in the second quarter.
The addition had a 0.09% impact on the Matthews Japan Fund (Trades, Portfolio)’s portfolio. It now owns 2,162,000 shares in the company.
Headquartered in Shinagawa, Tokyo, Broadleaf is a Japanese company that creates provision software, IT solutions and services that support the automotive aftermarket and other industries. The company offers packages for automotive maintenance shops, bodywork shops, car dealers, recycling companies, parts dealers, automotive electrical wiring companies, automotive glass shops, radiator manufacturers and other specialized companies. Broadleaf also develops and sells package software that supports information infrastructure of companies, including security infrastructure. The company was established in 2005 and has 788 employees.
Broadleaf has a market cap of 23.04 billion yen, an enterprise value of 16.67 billion yen, a price-earnings (P/E) ratio of 17.99 and a quick ratio of 3.06.
According to GuruFocus Broadleaf has an 8 of 10 financial rating, with an Altman Z-Score of 4.17 indicating that the company is in the safe zone, and it is not in danger of filing for bankruptcy. The company also has a 6 of 10 profitability and growth rating with a Joel Greenblatt (Trades, Portfolio) ROC of 190.25% ranking it higher than 84% of the companies in the global software application industry. Since the fund purchased its stake in the first quarter it has lost an estimated 15% return with its investment in Broadleaf.
Below is a Peter Lynch chart that shows Broadleaf is trading above its intrinsic value
The fund was established nearly 20 years ago on Dec. 31, 1998. The fund looks for long-term capital appreciation in companies located in Japan. The fund looks to invest in securities that are capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information, number of employees, size and stability of cash flow, management’s depth, adaptability and integrity, product lines, marketing strategies, corporate governance and financial health.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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