4194 Visional

Visional runs BizReach, the site where headhunters and employers approach professionals directly. Japanese workers change jobs more each year, and first-half sales rose 26%.

▲ Once Japanese professionals start changing jobs freely, they do not go back. BizReach is the platform that defines this category.  ▼ The company's own filings warn that revenue depends on corporate hiring appetite. A hiring downturn would test how cyclical this really is.

BizReach connects 41,800 employers and 9,700 headhunters, with 16 years of matching data, and keeps 26 yen of every 100 yen of sales as operating profit.

▲ Each new employer and headhunter makes the site more useful to candidates. A rival would have to rebuild both sides at once.  ▼ Profit at the HRMOS unit may come from a recent acquisition rather than its own growth. Recruit and LinkedIn chase the same professionals.

Founder-CEO Minami owns about 35%. Visional has never paid a dividend or bought back shares and has no stated policy, while net cash of about ¥72.7bn keeps building.

▲ The cash earns over 30% returns reinvested in the business, and big active funds Orbis and Capital now hold stakes and will push for a first payout.  ▼ Five years listed, zero paid out. New-business spending has no disclosed return hurdles. Shareholders only gain if the share price cooperates.

The business sells for 10.8 years of operating profit. Its capital earns 30.8%. Net cash is 22.6% of the market cap; 0.0% of profit goes out as dividends. Today's dividend yield is 0.0%. Even paying out all of its profit, the yield at today's price would be 5.0% — below the 6% floor, so the case rests on growth and the other squares. At the current payout, the cash pile alone equals today's market cap in about 15.5 years. How this valuation floor works →