Undiscovered Gems In Japan For September 2024

Despite recent turbulence in global markets, Japan's stock indices have shown resilience, with the Nikkei 225 and TOPIX Index experiencing notable fluctuations. This backdrop of economic shifts and investor sentiment offers a unique opportunity to explore lesser-known small-cap stocks that could offer potential growth. In this context, identifying a good stock often involves looking for companies with strong fundamentals, innovative products or services, and the ability to navigate economic uncertainties effectively. Here are three undiscovered gems in Japan that exemplify these qualities for September 2024.

Top 10 Undiscovered Gems With Strong Fundamentals In Japan

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Ryoyu Systems	NA	1.08%	8.08%	★★★★★★
Central Forest Group	NA	7.05%	14.29%	★★★★★★
Poppins	39.80%	8.36%	-7.40%	★★★★★★
Kanda HoldingsLtd	30.47%	4.35%	18.02%	★★★★★★
NJS	NA	4.97%	5.30%	★★★★★★
Ad-Sol Nissin	NA	4.02%	7.90%	★★★★★★
NPR-Riken	15.31%	10.00%	44.55%	★★★★★☆
Toho	82.16%	1.83%	47.38%	★★★★★☆
AJIS	0.69%	0.07%	-12.44%	★★★★★☆
Pharma Foods International	191.14%	33.83%	23.46%	★★★★★☆

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

We'll examine a selection from our screener results.

G-Tekt (TSE:5970)

Simply Wall St Value Rating: ★★★★★★

Overview: G-Tekt Corporation manufactures and sells auto body components and transmission parts in Japan and internationally, with a market cap of ¥68.67 billion.

Operations: G-Tekt generates revenue primarily from the sale of auto body components and transmission parts. The company operates with a market cap of ¥68.67 billion.

G-Tekt, a small cap player in the auto components industry, has shown impressive performance with earnings growth of 33.5% over the past year, outpacing the industry's 21.4%. The company's price-to-earnings ratio stands at 5.1x, significantly lower than Japan's market average of 13.2x, indicating good value relative to peers. Additionally, G-Tekt's debt-to-equity ratio improved from 34.1% to 18.5% over five years and remains free cash flow positive.

• Click to explore a detailed breakdown of our findings in G-Tekt's health report.

• Gain insights into G-Tekt's historical performance by reviewing our past performance report.

Kamei (TSE:8037)

Simply Wall St Value Rating: ★★★★★★

Overview: Kamei Corporation operates as a general trading company in Japan and internationally with a market cap of ¥66.09 billion.

Operations: The primary revenue streams for Kamei Corporation are the Energy Business (¥279.16 billion) and Overseas/Trade Business (¥84.52 billion), followed by the Automotive Related Business (¥75.41 billion). The Food Business also contributes significantly with ¥36.47 billion in revenue.

Kamei, a small cap in Japan, has been trading at 69.7% below its estimated fair value. Over the past year, earnings grew by 11.1%, outpacing the Trade Distributors industry growth of 6.7%. The company repurchased 800,000 shares for ¥1.45 billion between May and June this year, representing 2.38% of outstanding shares. With high-quality earnings and positive free cash flow, Kamei's debt to equity ratio improved from 48.4% to 31.2% over five years.

• Take a closer look at Kamei's potential here in our health report.

• Understand Kamei's track record by examining our Past report.

Marusan Securities (TSE:8613)

Simply Wall St Value Rating: ★★★★★☆

Overview: Marusan Securities Co., Ltd. operates in the financial products trading sector in Japan with a market cap of ¥64.08 billion.

Operations: Marusan Securities Co., Ltd. generates revenue primarily from trading financial products in Japan. The company has a market capitalization of ¥64.08 billion.

Marusan Securities, a smaller player in Japan's financial sector, has shown remarkable earnings growth of 158.6% over the past year, outpacing the industry average of 36.1%. The company's debt to equity ratio improved from 6.6 to 5.3 over five years, indicating better financial health. With levered free cash flow reaching ¥3.85 billion as of September 2024 and high-quality earnings reported consistently, Marusan appears well-positioned for continued stability and potential growth in its niche market segment.

• Navigate through the intricacies of Marusan Securities with our comprehensive health report here.

• Examine Marusan Securities' past performance report to understand how it has performed in the past.

Key Takeaways

• Navigate through the entire inventory of 749 Japanese Undiscovered Gems With Strong Fundamentals here.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

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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