– Japanese education test prep company with 30k students and 154 locations in Kanagawa prefecture.
– Cash + real estate equal to current EV.
– Investors get operating business for free.
– 27 years of revenue/profit growth.
– Strong focus on quality – above average teacher salaries/benefits, well-chosen location within a single core area.
– Multiple grow avenues.
– At 10x PE and 5.4x, EV/EBIT is cheap historically and vs peers.
– Founder/management/employees own almost 50% of the stock.
– Since 1995 returned 100% of cumulative FCF in dividends and repurchases.
Valuation: Step’s valuation is about the cheapest it’s been in a decade on a trailing 10x PE, EV/EBIT of 5.4x, and far cheaper than many peers.
Exp. gain: Not specified.
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