Undiscovered Gems in Japan August 2024

Japan’s stock markets have recently experienced significant volatility, driven by a rebounding yen and concerns over global economic growth. Despite these fluctuations, the Nikkei 225 Index and the broader TOPIX Index managed to recoup much of their losses by the end of last week. In such an environment, identifying stocks with strong fundamentals and unique growth potential becomes crucial for investors seeking stability and long-term gains.

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%	★★★★★★
Nice	71.69%	-1.98%	36.48%	★★★★★★
Totech	16.86%	5.13%	11.52%	★★★★★★
Icom	NA	4.02%	13.06%	★★★★★★
Ad-Sol Nissin	NA	4.02%	7.90%	★★★★★★
Otec	9.81%	2.32%	-1.39%	★★★★★★
Techno Smart	NA	5.05%	-2.17%	★★★★★★
Toho	82.16%	1.83%	47.38%	★★★★★☆
Kondotec	12.01%	6.76%	0.32%	★★★★★☆
AJIS	0.69%	0.07%	-12.44%	★★★★★☆

Click here to see the full list of 715 stocks from our Japanese Undiscovered Gems With Strong Fundamentals screener.

Here we highlight a subset of our preferred stocks from the screener.

Integral (TSE:5842)

Simply Wall St Value Rating: ★★★★★☆

Overview: Integral Corporation is a private equity firm specializing in management buyouts, turnarounds, leveraged buyouts, mezzanine, and other minority investments with a market cap of ¥116.44 billion.

Operations: Integral generates revenue through management buyouts, turnarounds, leveraged buyouts, and mezzanine investments. The company has a market cap of ¥116.44 billion.

Integral's recent performance highlights its rapid earnings growth of 146% over the past year, significantly outpacing the Capital Markets industry average of 30%. The company's interest payments are well covered by EBIT at 173 times coverage, indicating strong financial health. Additionally, Integral has more cash than total debt and remains free cash flow positive. Recent news includes a projected revenue boost of approximately ¥5.1 billion and profit increase by ¥3.4 billion for fiscal year-end due to carried interest distribution from affiliated funds.

• Delve into the full analysis health report here for a deeper understanding of Integral.

• Explore historical data to track Integral's performance over time in our Past section.

Mitsubishi Logisnext (TSE:7105)

Simply Wall St Value Rating: ★★★★★☆

Overview: Mitsubishi Logisnext Co., Ltd. designs, develops, manufactures, and sells electric and engine-powered forklifts, transportation robots, automated warehouses, electric vehicles, monorails, and LAN and other logistics equipment in Japan with a market cap of ¥126.79 billion.

Operations: The company generates revenue primarily from the sale of forklifts, transportation robots, automated warehouses, electric vehicles, monorails, and logistics equipment. The market cap stands at ¥126.79 billion.

Mitsubishi Logisnext, a notable player in the machinery sector, has shown impressive earnings growth of 90.5% over the past year, significantly outpacing the industry average of 13.2%. The company’s net debt to equity ratio stands at a high 112.9%, though it has reduced from 257.7% over five years, indicating improved financial management. Recently, Mitsubishi repurchased 120,700 shares for ¥192 million as part of its buyback program aimed at granting restricted stock to directors and other key personnel.

• Navigate through the intricacies of Mitsubishi Logisnext with our comprehensive health report here.

• Gain insights into Mitsubishi Logisnext's historical performance by reviewing our past performance report.

Mizuho Leasing Company (TSE:8425)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Mizuho Leasing Company, Limited offers general leasing services both in Japan and internationally, with a market cap of ¥275.43 billion.

Operations: Mizuho Leasing generates revenue through its general leasing services both domestically and internationally. The company's cost structure includes operating expenses directly tied to its leasing activities, impacting its net profit margin, which stands at 4.56%.

Mizuho Leasing Company has seen notable developments recently, with earnings growth of 40.7% over the past year, surpassing the industry average of 18.3%. The company's net debt to equity ratio stands at a high 729.9%, though interest payments are well covered by EBIT at 19.5x coverage. Despite shareholder dilution in the past year, Mizuho Leasing is trading at approximately 41.8% below its estimated fair value, indicating potential undervaluation for investors seeking opportunities in Japan's financial sector.

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

• Learn about Mizuho Leasing Company's historical performance.

Summing It All Up

• Delve into our full catalog of 715 Japanese Undiscovered Gems With Strong Fundamentals here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• 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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