Nippon Carbon And 2 Other Undiscovered Gems With Strong Fundamentals

As Japan's stock markets recover from recent volatility, the Nikkei 225 and TOPIX indices have shown resilience, reflecting cautious optimism amid a complex economic landscape. In this environment, identifying stocks with strong fundamentals becomes increasingly important for investors seeking stability and growth. In our exploration of Japan's market, we highlight Nippon Carbon and two other undiscovered gems that exhibit robust financial health and promising potential.

Top 10 Undiscovered Gems With Strong Fundamentals In Japan

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Nihon Parkerizing	0.31%	0.86%	4.40%	★★★★★★
QuickLtd	0.73%	9.61%	14.56%	★★★★★★
Kanda HoldingsLtd	30.47%	4.35%	18.02%	★★★★★★
Ad-Sol Nissin	NA	4.02%	7.90%	★★★★★★
Techno Smart	NA	6.07%	-0.57%	★★★★★★
Icom	NA	4.68%	14.92%	★★★★★★
Kondotec	11.75%	6.85%	2.62%	★★★★★☆
Nikko	31.99%	4.24%	-8.75%	★★★★★☆
AJIS	0.69%	0.07%	-12.44%	★★★★★☆
Kappa Create	74.42%	-0.45%	3.62%	★★★★★☆

Click here to see the full list of 754 stocks from our Japanese Undiscovered Gems With Strong Fundamentals screener.

We're going to check out a few of the best picks from our screener tool.

Nippon Carbon (TSE:5302)

Simply Wall St Value Rating: ★★★★★★

Overview: Nippon Carbon Co., Ltd. manufactures and sells carbon products in Japan, China, and internationally with a market cap of ¥47.27 billion.

Operations: Nippon Carbon generates revenue primarily from its Carbon Products Connection segment, which contributed ¥35.12 billion, and its Carbonized Silicon Product Related segment, which added ¥2.62 billion.

Nippon Carbon, a small player in Japan's carbon industry, offers compelling value with a P/E ratio of 10.8x compared to the JP market's 13.4x. The company has more cash than total debt and its debt-to-equity ratio decreased from 26.3% to 15.4% over five years. Earnings grew by 34.3% last year, outpacing the electrical industry's growth of 20.2%, and are forecasted to grow at an annual rate of 11.39%.

• Get an in-depth perspective on Nippon Carbon's performance by reading our health report here.

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

Ryoden (TSE:8084)

Simply Wall St Value Rating: ★★★★★☆

Overview: Ryoden Corporation operates in the sale of factory automation systems, cooling and heating systems, information and communication technologies, facilities systems, and electronics both in Japan and internationally with a market cap of ¥55.36 billion.

Operations: Ryoden Corporation generates revenue from X-Tech (¥7.12 billion) and Electronics (¥160.74 billion), with a segment adjustment of ¥82.81 billion.

Ryoden's earnings have grown 12.2% annually over the past five years, although its recent 7.3% growth lagged behind the Electronic industry’s 7.8%. The company's debt to equity ratio has risen from 1.2 to 3.8 over this period, indicating increased leverage. Despite this, Ryoden remains profitable with a P/E ratio of 10x, below the JP market average of 13.4x. Recent guidance forecasts full-year net sales at ¥219 billion and operating profit at ¥7.2 billion for fiscal year ending March 2025.

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

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

Mos Food Services (TSE:8153)

Simply Wall St Value Rating: ★★★★★☆

Overview: Mos Food Services, Inc. operates the MOS BURGER hamburger franchise and other restaurant businesses in Japan and internationally, with a market cap of ¥105.36 billion.

Operations: Mos Food Services generates revenue primarily from its MOS BURGER franchise and other restaurant businesses. The company reported a market cap of ¥105.36 billion.

Mos Food Services, a small cap company in Japan's food industry, has shown impressive financial performance. Earnings surged by 3882.6% over the past year, significantly outpacing the hospitality sector's 32.4%. Trading at 13.3% below its estimated fair value, it offers good investment potential. The company's debt to equity ratio increased slightly from 5.9% to 6% over five years but remains manageable with more cash than total debt and positive free cash flow indicators.

• Click to explore a detailed breakdown of our findings in Mos Food Services' health report.

• Gain insights into Mos Food Services' historical performance by reviewing our past performance report.

Turning Ideas Into Actions

• Access the full spectrum of 754 Japanese Undiscovered Gems With Strong Fundamentals by clicking on this link.
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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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