Top Japanese Stocks Trading Below Estimated Value For August 2024

Japan's stock markets have shown a robust rebound recently, with the Nikkei 225 Index gaining 8.7% and the broader TOPIX Index up 7.9%, bolstered by better-than-expected economic data from both Japan and the U.S. This positive momentum presents an opportune moment to explore undervalued stocks that could offer significant potential for investors looking to capitalize on these favorable conditions. In this context, identifying stocks trading below their estimated value becomes crucial as they may provide a margin of safety and attractive upside potential amidst the current market optimism.

Top 10 Undervalued Stocks Based On Cash Flows In Japan

Name	Current Price	Fair Value (Est)	Discount (Est)
Syuppin (TSE:3179)	¥1371.00	¥2663.68	48.5%
Hottolink (TSE:3680)	¥339.00	¥661.66	48.8%
Kadokawa (TSE:9468)	¥2907.00	¥5628.30	48.4%
BayCurrent Consulting (TSE:6532)	¥4498.00	¥8602.68	47.7%
SHIFT (TSE:3697)	¥11860.00	¥23238.41	49%
Ohara (TSE:5218)	¥1332.00	¥2577.46	48.3%
Visional (TSE:4194)	¥8740.00	¥17155.73	49.1%
Fudo Tetra (TSE:1813)	¥2318.00	¥4409.29	47.4%
TORIDOLL Holdings (TSE:3397)	¥3605.00	¥7058.02	48.9%
SBI ARUHI (TSE:7198)	¥865.00	¥1704.27	49.2%

Click here to see the full list of 82 stocks from our Undervalued Japanese Stocks Based On Cash Flows screener.

Below we spotlight a couple of our favorites from our exclusive screener.

SHIFT (TSE:3697)

Overview: SHIFT Inc. provides software quality assurance and testing solutions in Japan, with a market cap of ¥196.93 billion.

Operations: The company generates revenue through its software quality assurance and testing solutions in Japan, amounting to ¥196.93 billion.

Estimated Discount To Fair Value: 49%

SHIFT Inc. is currently trading at ¥11,860, significantly below its estimated fair value of ¥23,238.41. Despite a highly volatile share price over the past three months, SHIFT's earnings have grown 36.3% annually over the past five years and are forecast to grow 32.76% per year moving forward. Additionally, its revenue is expected to increase by 21.2% annually, outpacing the Japanese market average of 4.3%.

• In light of our recent growth report, it seems possible that SHIFT's financial performance will exceed current levels.
• Click to explore a detailed breakdown of our findings in SHIFT's balance sheet health report.

Visional (TSE:4194)

Overview: Visional, Inc., along with its subsidiaries, offers human resources platform solutions in Japan and has a market cap of ¥328.95 billion.

Operations: Visional generates revenue from its human resources platform solutions in Japan.

Estimated Discount To Fair Value: 49.1%

Visional Inc. is trading at ¥8740, significantly below its estimated fair value of ¥17155.73, indicating it may be undervalued based on cash flows. The company's earnings are forecast to grow 11.2% per year, outpacing the Japanese market's 8.5%. Revenue is expected to increase by 12.5% annually compared to the market average of 4.3%. Recent board meeting discussions on revising consolidated earnings forecasts could further impact its valuation positively or negatively.

• Our expertly prepared growth report on Visional implies its future financial outlook may be stronger than recent results.
• Delve into the full analysis health report here for a deeper understanding of Visional.

Kadokawa (TSE:9468)

Overview: Kadokawa Corporation operates as an entertainment company in Japan with a market cap of ¥390.89 billion.

Operations: Kadokawa Corporation generates revenue from various segments including Game (¥28.63 billion), Publication (¥143.28 billion), Web Service (¥20.44 billion), Animation/Film (¥46.36 billion), and Education/Edtech (¥13.83 billion).

Estimated Discount To Fair Value: 48.4%

Kadokawa Corporation is trading at ¥2907, well below the estimated fair value of ¥5628.3, highlighting its undervaluation based on cash flows. Earnings are projected to grow significantly at 21.2% annually over the next three years, outpacing the Japanese market's 8.5%. Despite recent share price volatility, analysts predict a potential rise of 27.4%. However, revenue growth is expected to be moderate at 6.6% per year and return on equity remains low at 10.6%.

• Insights from our recent growth report point to a promising forecast for Kadokawa's business outlook.
• Click here and access our complete balance sheet health report to understand the dynamics of Kadokawa.

Next Steps

• Reveal the 82 hidden gems among our Undervalued Japanese Stocks Based On Cash Flows screener with a single click here.
• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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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