Simplex Holdings And 2 Japanese Stocks Estimated To Be Trading Below Fair Value
Reviewed by Simply Wall St
Japan's stock markets have recently faced significant declines, with the Nikkei 225 Index falling 4.7% and the broader TOPIX Index down 6.0%, partly due to a hawkish turn from the Bank of Japan and disappointing U.S. economic data. Amid this turbulence, investors might find opportunities in stocks that are trading below their fair value. Identifying undervalued stocks requires careful analysis of financial health, growth potential, and market conditions; in this context, Simplex Holdings and two other Japanese companies stand out as potentially undervalued investments worth considering.
Top 10 Undervalued Stocks Based On Cash Flows In Japan
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Suzumo Machinery (TSE:6405) | ¥1266.00 | ¥2453.01 | 48.4% |
| Japan Investment Adviser (TSE:7172) | ¥952.00 | ¥1829.55 | 48% |
| Insource (TSE:6200) | ¥835.00 | ¥1615.35 | 48.3% |
| NittoseikoLtd (TSE:5957) | ¥519.00 | ¥1019.46 | 49.1% |
| Yamaichi ElectronicsLtd (TSE:6941) | ¥2854.00 | ¥5605.80 | 49.1% |
| ServerworksLtd (TSE:4434) | ¥2245.00 | ¥4404.78 | 49% |
| AGC (TSE:5201) | ¥4663.00 | ¥9216.59 | 49.4% |
| Members (TSE:2130) | ¥732.00 | ¥1420.43 | 48.5% |
| Premium Group (TSE:7199) | ¥1729.00 | ¥3328.13 | 48% |
| TORIDOLL Holdings (TSE:3397) | ¥3629.00 | ¥7168.89 | 49.4% |
Let's take a closer look at a couple of our picks from the screened companies.
Simplex Holdings (TSE:4373)
Overview: Simplex Holdings, Inc. offers strategic consulting, design and development, and operation and maintenance services to financial institutions, corporations, and public sectors globally with a market cap of ¥125.34 billion.
Operations: Revenue from the provision of IT solutions amounts to ¥42.26 billion.
Estimated Discount To Fair Value: 45.9%
Simplex Holdings appears undervalued based on cash flows, trading at ¥2150, significantly below its estimated fair value of ¥3976.5. Despite a highly volatile share price and an unstable dividend track record, the company forecasts robust earnings growth of 20.16% annually over the next three years and revenue growth of 12.8% per year, outpacing the JP market averages. Analysts agree that the stock price could rise by 53.6%.
- The analysis detailed in our Simplex Holdings growth report hints at robust future financial performance.
- Unlock comprehensive insights into our analysis of Simplex Holdings stock in this financial health report.
Premium Group (TSE:7199)
Overview: Premium Group Co., Ltd. provides financing and services worldwide and has a market cap of ¥65.51 billion.
Operations: Premium Group's revenue segments include Finance at ¥19.20 billion, Failure Warranty at ¥8.15 billion, and Auto Mobility Service (including Car Premium Business) at ¥7.51 billion.
Estimated Discount To Fair Value: 48%
Premium Group is trading at ¥1729, significantly below its estimated fair value of ¥3328.13, suggesting it may be undervalued based on cash flows. The company's earnings are forecast to grow at 18.86% annually, outpacing the JP market's 8.9%. Despite recent dividend increases and strong profit growth (13.5% last year), its debt coverage by operating cash flow remains a concern. Recent board meetings focused on treasury shares disposal and dividends reflect active financial management strategies.
- Our expertly prepared growth report on Premium Group implies its future financial outlook may be stronger than recent results.
- Navigate through the intricacies of Premium Group with our comprehensive financial health report here.
KATITAS (TSE:8919)
Overview: KATITAS CO., Ltd. (TSE:8919) specializes in surveying, purchasing, refurbishing, remodeling, and selling used homes to individuals and families in Japan, with a market cap of ¥135.51 billion.
Operations: KATITAS generates revenue from surveying, purchasing, refurbishing, remodeling, and selling used homes to individuals and families in Japan.
Estimated Discount To Fair Value: 45.4%
KATITAS is trading at ¥1738, significantly below its estimated fair value of ¥3183.99, indicating it is highly undervalued based on cash flows. Earnings are forecast to grow by 9.1% annually, slightly outpacing the JP market's 8.9%. Despite an unstable dividend track record, recent profit growth of 39.5% and strong financial forecasts highlight solid fundamentals. Recent board meetings addressed treasury stock disposal and legal appeals, reflecting active corporate governance efforts.
- Our earnings growth report unveils the potential for significant increases in KATITAS' future results.
- Get an in-depth perspective on KATITAS' balance sheet by reading our health report here.
Turning Ideas Into Actions
- Access the full spectrum of 73 Undervalued Japanese Stocks Based On Cash Flows by clicking on this link.
- 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.
- Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.
Searching for a Fresh Perspective?
- 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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About TSE:4373
Simplex Holdings
Provides strategic consulting, design and development, and operation and maintenance services to financial institutions, corporations, and the public sectors worldwide.
Good value with reasonable growth potential.
