Meeting with head of investor relation of Nidec

3 November 2017

Dear Fellow Investors,

Yesterday, I had a meeting at the KL Hilton with Mr Masahiro Nagayasu head of investor relations of Nidec., a multi national  with an over 80 % world market share of micro electric motors.

We have been buying this company after last month’s visit to their company headquarters in Kyoto.so this was a good opportunity to find out more.

When I bought it I knew we had an edge . Now I realize we have a bigger edge.

I am impressed by Nidec’s   focus on high tech and innovation. This is where investor money is flowing.

For example, they are leveraging on the global electric vehicle trend.

The way to make money is to buy into a trend before the crowd. The electric car trend is in its infancy. Based of the above Bloomberg chart we are in the early stages of electric cars.
  
Buying into a hot story without performing due diligence is the recipe for big losses. Investing in an unfamiliar market such as Japan has issues such as language and culture. That is why I took a day from our precious holiday to Kyoto to see Nidec for myself .  

A review of Bloomberg’s research portal shows Nidec to have strong fundamentals such as growing earnings, profits, ROE and low debt.

They have a diversified customer base including Honda, Apple, Seagate, Rolls Royce, Caterpillar, GE and Shindler.

98 % of Nidec’s production is outside Japan in 43 countries including Singapore, China, Thailand and Vietnam. This helps diversify currency and labor risk.

I prefer companies which are component suppliers such as Nidec to the actual electric car company.

I would not advise buying a pure electric car company- look at the collapse of Tesla share price last night-

Tesla is overloaded with debt, high capex and questionable management.  With companies such as this it is only a matter of time before the ice breaks.

The reaction to the Malaysian budget was muted. The broad market continues to drift. We will continue with our defensive dividend strategy and focus on high quality niche companies. At some point the sun will rise. It always does.  

Invest well and grow your wealth
Bill   

With Japanese government buying of ETFs the Nikkei has reached a 21 year high. Will the momentum continue ?  If you think so Nidec is a low risk, high potential profit  play should clouds emerge.

Nidec is an approved share for our Phillip Global Wrap Accounts. Please contact me if you need more information.