Polaris Capital Management, LLC on FUJIFILM Holdings Corporation
Thesis
Polaris identified Fujifilm as a value opportunity because the market was not fully recognizing several higher-value businesses inside the company. In particular, the manager believes Fujifilm's contract drug-manufacturing and semiconductor-materials operations are underpriced. Those growth businesses sit alongside stable cash flows from healthcare and imaging. The combination gives Polaris exposure to higher-growth activities while retaining support from established businesses.
“Fujifilm Holdings Corp. was another value opportunity, with the market underpricing its contract drug-manufacturing and semiconductor-materials businesses relative to its stable healthcare and imaging cash flows.”
Key risks
- Contract drug-manufacturing growth disappoints
- Semiconductor-materials demand weakens
- The market continues to undervalue the company's business mix