There’s a Japanese mobile gaming business trading at roughly:

• 3x P/FCF

• 3.4x EV/FCF

• 29%+ FCF yield on EV

• 39% adjusted forward ROE

…despite generating roughly ¥1.25B of annual owner free cash flow.

The market cap is ¥3.85B.

The business acquired another company in 2022 for ¥5B.

But the acquired company contained more net assets than the purchase price itself and generated enormous recurring cash flows.

In effect:

A Japanese cash hoarder bought another Japanese cash hoarder at below tangible value while paying ~2x operating cash flow for the earnings stream.

Then the market decided the combined company was worth almost nothing anyway.

Japan remains undefeated.