The Globe and Mail has an article on Matthew Haynes, a deep-value investor managing the GGOF Global Absolute Return Fund:
Mr. Haynes prefers deep-value stocks, looking for companies with assets that are trading at 50 cents on the dollar. He favours those issues where there is an event or catalyst in the stock story that should unlock value not yet reflected in the stock price.
The $74.4-million GGOF fund is relatively new, having been launched in July, 2006. Its return since inception is 21.59 per cent and so far this year the return is 3.87 per cent. Canada accounts for about 16.6 per cent of the portfolio, the U.S. 15.9 per cent, and Japan and the Netherlands 8.4 per cent each.
I'm not familiar with Haynes or his fund, but I notice he's a fellow shareholder in Takefuji (8564/JP or TAKAF/OTC):
Promise Co. Ltd. and Takefuji Corp. are in the Japanese consumer finance industry, a sector that has suffered in the face of concern about regulatory changes that will reduce the interest rates they can charge. The companies are trading "at huge discounts to tangible book value" yet have "overcapitalized balance sheets," Mr. Haynes said. Promise already has a large percentage of its loan book at a lower rate, "so it may not suffer the same decline in earnings as some" of the other companies, he said. Takefuji is trading at a similarly depressed valuation. Promise closed at ¥3,610 ($33.74 Canadian) Friday and Takefuji at ¥4,020.
The article doesn't say when Haynes bought the Japanese consumer lenders, or whether or not he's underwater in these positions. I hope he came into them recently. Because, if you're a regular Controlled Greed.com reader, you know I bought Takefuji a year ago and it's the worst performer in my portfolio.
Yet I remain cautiously optimistic Takefuji will work out. Ditto Media General (MEG/NYSE), another portfolio poor performer. Am I being foolish or bullheaded? Well, I prefer to think of myself as being patient. (One year in a 3-to-5 year time frame is just that -- one year -- after all.)
And time will tell whether Takefuji is a deep-value stock. Or just a case of deep you-know-what. ;-)