Discovering Undiscovered Gems In Japan August 2024

Japan’s stock markets have shown a strong rebound recently, with the Nikkei 225 Index gaining 8.7% and the broader TOPIX Index up 7.9%, buoyed by better-than-expected U.S. economic data and a weaker yen aiding exporters. This positive sentiment is further supported by Japan's robust GDP growth in the second quarter, which exceeded expectations. In this favorable market environment, identifying promising stocks involves looking for companies with solid fundamentals, innovative products or services, and potential for growth within their sectors. Here are three lesser-known Japanese stocks that could be considered undiscovered gems in August 2024.

Top 10 Undiscovered Gems With Strong Fundamentals In Japan

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Toukei Computer	NA	5.46%	12.14%	★★★★★★
NJS	NA	4.97%	5.30%	★★★★★★
AOKI Holdings	28.27%	0.91%	37.15%	★★★★★★
Uoriki	NA	3.90%	6.15%	★★★★★★
Icom	NA	4.02%	13.06%	★★★★★★
NPR-Riken	15.31%	10.00%	44.55%	★★★★★☆
Innotech	38.96%	7.08%	6.36%	★★★★★☆
YagiLtd	32.86%	-9.57%	-0.12%	★★★★☆☆
CAC Holdings	14.97%	-0.57%	5.02%	★★★★☆☆
Toho Bank	98.27%	0.43%	22.80%	★★★★☆☆

Click here to see the full list of 749 stocks from our Japanese Undiscovered Gems With Strong Fundamentals screener.

Let's uncover some gems from our specialized screener.

istyle (TSE:3660)

Simply Wall St Value Rating: ★★★★★☆

Overview: istyle Inc. operates a beauty portal site called @cosme in Japan and internationally, with a market cap of ¥40.17 billion.

Operations: Revenue streams for istyle Inc. include Retail (¥42.24 billion), Global Business (¥3.94 billion), and Marketing Solution (¥9.24 billion). The company incurs costs associated with these segments, impacting its overall profitability.

isstyle Inc. has shown impressive earnings growth of 341.5% over the past year, outpacing the Specialty Retail industry’s 6.5%. The company forecasts net sales of ¥64 billion and operating income of ¥2.4 billion for FY2025, with net income per share expected at ¥20.31. Despite a highly volatile share price recently, istyle's interest payments are well covered by EBIT (55x), and its net debt to equity ratio stands at a satisfactory 12.8%.

• Get an in-depth perspective on istyle's performance by reading our health report here.

• Assess istyle's past performance with our detailed historical performance reports.

Fukushima GalileiLtd (TSE:6420)

Simply Wall St Value Rating: ★★★★★★

Overview: Fukushima Galilei Co. Ltd. manufactures, sells, and maintains commercial freezer refrigerators, refrigerated showcases, and other refrigeration devices in Japan and internationally with a market cap of ¥111.50 billion.

Operations: The company generates revenue primarily through the manufacture and sale of commercial refrigeration devices. It has a market cap of ¥111.50 billion, with notable trends in its net profit margin over recent periods.

Fukushima Galilei Ltd. has shown impressive performance, with earnings growing by 42.2% over the past year, outpacing the Machinery industry’s 13.1%. The company repurchased shares in 2024, indicating confidence in its valuation. Trading at 77.7% below our fair value estimate, it offers potential upside for investors. With no debt and a history of high-quality earnings, Fukushima Galilei stands out as a strong contender among Japan's smaller firms poised for growth.

• Click here to discover the nuances of Fukushima GalileiLtd with our detailed analytical health report.

• Review our historical performance report to gain insights into Fukushima GalileiLtd's's past performance.

Kiyo Bank (TSE:8370)

Simply Wall St Value Rating: ★★★★☆☆

Overview: The Kiyo Bank, Ltd. offers a range of banking products and services to individuals, corporate entities, and business customers in Japan with a market cap of ¥119.91 billion.

Operations: Kiyo Bank generates revenue primarily from interest income, service fees, and other banking operations. The net profit margin for the most recent fiscal year was 12.34%.

Kiyo Bank, with total assets of ¥5,925.8B and equity of ¥232.3B, has a solid foundation supported by customer deposits totaling ¥4,779.2B. The bank's loans amount to ¥3,930.9B with a net interest margin of 0.9%. Although its allowance for bad loans is insufficient at 1.6%, it has repurchased 430,200 shares for ¥805.74 million recently. Notably, Kiyo's earnings surged by 618% last year compared to the industry’s 19%.

• Dive into the specifics of Kiyo Bank here with our thorough health report.

• Examine Kiyo Bank's past performance report to understand how it has performed in the past.

Next Steps

• Unlock our comprehensive list of 749 Japanese Undiscovered Gems With Strong Fundamentals by clicking here.
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Searching for a Fresh Perspective?

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• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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