3 Undiscovered Japanese Gems To Enhance Your Investment Portfolio

Japan's stock markets have recently experienced volatility, influenced by political shifts and a fluctuating yen, leading to declines in major indices like the Nikkei 225 and TOPIX. Amid this backdrop of uncertainty, identifying stocks with strong fundamentals and growth potential can be crucial for enhancing an investment portfolio.

Top 10 Undiscovered Gems With Strong Fundamentals In Japan

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Tokyo Tekko	10.81%	7.30%	7.30%	★★★★★★
Nihon Parkerizing	0.31%	0.86%	4.40%	★★★★★★
Central Forest Group	NA	7.05%	14.29%	★★★★★★
Kanda HoldingsLtd	30.47%	4.35%	18.02%	★★★★★★
Nitto Fuji Flour MillingLtd	0.80%	6.26%	4.41%	★★★★★★
Toukei Computer	NA	5.46%	12.14%	★★★★★★
Ohashi Technica	NA	1.57%	-20.55%	★★★★★★
NPR-Riken	15.31%	10.00%	44.55%	★★★★★☆
MIRARTH HOLDINGSInc	266.33%	3.00%	-2.40%	★★★★☆☆
Ogaki Kyoritsu Bank	139.93%	2.20%	-0.27%	★★★★☆☆

Click here to see the full list of 733 stocks from our Japanese Undiscovered Gems With Strong Fundamentals screener.

Let's dive into some prime choices out of from the screener.

SAN-ALTD (TSE:2659)

Simply Wall St Value Rating: ★★★★★★

Overview: SAN-A CO., LTD. operates a chain of supermarkets in Okinawa and has a market capitalization of ¥162.04 billion.

Operations: SAN-A generates revenue primarily from its retail segment, contributing ¥221.26 billion, with an additional ¥8.39 billion from convenience stores.

SAN-ALTD, a promising player in Japan's market landscape, is debt-free and boasts earnings growth of 34.4% over the past year, outpacing the Consumer Retailing industry's 22.2%. Trading at 42.6% below its estimated fair value, it offers high-quality earnings with a forecasted annual growth of 4.09%. Recent guidance suggests operating revenue for FY2025 at ¥236 billion with profits of ¥11 billion, though dividends are halved to ¥55 per share from last year's ¥110.

• Dive into the specifics of SAN-ALTD here with our thorough health report.

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

ISE Chemicals (TSE:4107)

Simply Wall St Value Rating: ★★★★★★

Overview: ISE Chemicals Corporation is involved in the production, processing, and trade of iodine derivatives and nickel and cobalt compounds in Japan with a market capitalization of ¥111.87 billion.

Operations: ISE Chemicals generates revenue primarily from its Iodine and Natural Gas Business, contributing ¥24.94 billion, and the Metal Compound Business, adding ¥4.25 billion.

ISE Chemicals, a nimble player in the market, recently joined the S&P Global BMI Index. Its earnings growth of 20% over the past year outpaced the industry average of 13%, showcasing high-quality earnings. The company is in a solid financial position with more cash than total debt and has improved its debt-to-equity ratio from 2.5 to 1.8 over five years. Despite this, future earnings are projected to decrease by about 1% annually for three years.

• Click to explore a detailed breakdown of our findings in ISE Chemicals' health report.

• Gain insights into ISE Chemicals' past trends and performance with our Past report.

H2O Retailing (TSE:8242)

Simply Wall St Value Rating: ★★★★☆☆

Overview: H2O Retailing Corporation operates department stores, supermarkets, and shopping centers in Japan with a market capitalization of ¥226.17 billion.

Operations: H2O Retailing generates revenue primarily through its department stores, supermarkets, and shopping centers in Japan. The company's financial performance is reflected in its gross profit margin trends, which provide insights into operational efficiency and cost management.

H2O Retailing, a nimble player in the retail sector, has outpaced its peers with a remarkable 135.6% earnings growth over the past year, significantly above the industry average of 22.2%. The company trades at an attractive 85.1% below its estimated fair value and benefits from a satisfactory net debt to equity ratio of 39.3%. Recent sales figures show robust performance, with September sales at 105.8% year-on-year, reflecting strong domestic and inbound demand.

• Unlock comprehensive insights into our analysis of H2O Retailing stock in this health report.

• Gain insights into H2O Retailing's historical performance by reviewing our past performance report.

Key Takeaways

• Get an in-depth perspective on all 733 Japanese Undiscovered Gems With Strong Fundamentals by using our screener here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Interested In Other Possibilities?

• 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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