Taking Advantage

by | Sep 9, 2003 | Archives

One great benefit of speaking at Jyske Bank's seminar is that I hear and meet some really great speakers. One this year was the retired pilot, Stephen Rassmussen. He is famous as the SAS pilot who in 1991 crash landed his plane after both engines quit on take off (at just 3,000 feet). Not one of his 129 passengers was lost. He talked about how even small decisions can be a matter of life and wealth and was truly inspirational.

One story he told was how a man who stuttered badly was a top salesman of Bibles by such an order of magnitude that the publishers he worked for called him in to learn his secret. He explained his effectiveness was due to his short sales presentation. It went like this, w-w-w-w-w-w-w-w-would you l-l-l-l-l-l-l-l-l-l-l-l-like to b-b-b-b-b-b-buy this b-b-b-b-b-b-b-b-Bible or would you rather I r-r-r-r-r-r-r-r-read I it to you.”

The point? He turned his handicap into a strength.

So what is the Western world's handicap today? Unhealthy. We are the weakest, sickest most unbalanced, overweight group of people in the world. The cost of this global physical handicap is costing taxpayers a fortune. The problem will grow as politicians get on nationalized health kicks and pay for more and more health care benefits.

When a nation is sickest, what are the best investments? We have been looking at shares that cash in on the Wellness Revolution. So here is a share that captures the Wellness Revolution and is in Japan. This is a share I picked up through the research of eClub advisor Michael Keppler who rates markets based on good value. Michael follows dozens of such shares and sent me a ton of data. Suzuken Co. is a Japanese share (listed on the Tokyo stock exchange # 9987) that may offer good value now. Researching this share led me to Given Diagnostic systems listed at Nasdaq under the code GIVN.

Given Imaging Ltd. is the developer of the M2A ingestible capsule endoscope and the Given Diagnostic System. Marubeni Corporation (TSE: 8002) one of Japan's largest trading corporations, and Suzuken Co., Ltd. (TSE: 9987), Japan's largest pharmaceuticals distributor, announced the formation of a joint venture in late 2002 to commercialize the Given Diagnostic System and the M2A capsule endoscope in Japan.

The joint venture, Given Imaging KK, will submit a request for regulatory and insurance reimbursement coverage in Japan, and then launch and market the Given Diagnostic System. Suzuken, which has more than 3,500 sales representatives, nearly countrywide coverage, and over $7 billion in sales last year, was appointed by Given Imaging KK as its exclusive sub-distributor in Japan. Marubeni, with approximately $75 billion in trading volume last year, was appointed Given Imaging KK's exclusive import agent. Triangle Technologies Ltd., which has helped form numerous strategic alliances in Japan, assisted Given Imaging in forming the joint venture. There is enormous potential for the M2A capsule endoscope in Japan and the venture with these large partners can accelerate our penetration. By combining Marubeni's unparalleled presence in Japan with Suzuken's broad medical products distribution channel and Given's proven marketing experience, they have created a formidable force in gastrointestinal diagnostics.

I was first attracted to Suzuken by its good value numbers.

Its P/E ratio is a low 12.3 and its dividend at 0.81 is the highest in this sector for a Japanese company (which generally do not pay high dividends). The company also has almost no debt with a Debt/Equity ratio of four (the MSCI benchmark is 64). Price-to-book value is less than half of any other Japanese share in this sector plus its price-to-cash flow is much lower than any other as well.

Add this all together and you'll see that Suzuken (and perhaps Given Imaging) at Nasdaq are worth more than a second glance.Join us in North Carolina in November with Thomas Fischer of Jyske Bank to learn how to invest in value shares, more about cashing in on the Wellness Revolution and enhancing wealth through choosing the correct currencies. For details go to https://www.garyascott.com/courses/bldh.htmlUntil next message, may all your investments be well.