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As Japan's stock markets experience fluctuations amidst political changes and a new prime minister, investors are keenly observing potential opportunities in the region. With the Nikkei 225 and TOPIX indices showing recent declines, some stocks might be trading below their intrinsic value, presenting potential opportunities for discerning investors. Identifying undervalued stocks often involves looking at companies with strong fundamentals that may be temporarily overlooked due to broader market sentiments or geopolitical developments.
Top 10 Undervalued Stocks Based On Cash Flows In Japan
Name | Current Price | Fair Value (Est) | Discount (Est) |
Densan System Holdings (TSE:4072) | ¥2679.00 | ¥5306.56 | 49.5% |
Hagiwara Electric Holdings (TSE:7467) | ¥3430.00 | ¥6696.82 | 48.8% |
Kotobuki Spirits (TSE:2222) | ¥1825.00 | ¥3434.73 | 46.9% |
Stella Chemifa (TSE:4109) | ¥4400.00 | ¥8121.15 | 45.8% |
Pilot (TSE:7846) | ¥4649.00 | ¥8896.31 | 47.7% |
Hibino (TSE:2469) | ¥3590.00 | ¥6964.82 | 48.5% |
KeePer Technical Laboratory (TSE:6036) | ¥4280.00 | ¥7851.31 | 45.5% |
BayCurrent Consulting (TSE:6532) | ¥5193.00 | ¥9500.41 | 45.3% |
freee K.K (TSE:4478) | ¥3225.00 | ¥6064.00 | 46.8% |
Money Forward (TSE:3994) | ¥5914.00 | ¥11782.73 | 49.8% |
Let's take a closer look at a couple of our picks from the screened companies.
Infomart
Overview: Infomart Corporation operates an online BtoB EC trading platform for the food industry in Japan, with a market cap of ¥79.66 billion.
Operations: The company's revenue segments include ¥5.52 billion from B2B-PFES and ¥8.79 billion from B to B-PF FOOD.
Estimated Discount To Fair Value: 43%
Infomart is trading at ¥352, significantly below its fair value estimate of ¥617.6, indicating it may be undervalued based on cash flows. Earnings are forecast to grow at 39.1% annually, outpacing the broader Japanese market's growth rate of 8.7%. Despite a volatile share price recently, Infomart's revenue is expected to increase by 11.2% per year, surpassing the market average of 4.2%, with a high projected return on equity of 20.7% in three years.
Mercari
Overview: Mercari, Inc. develops and operates marketplace applications in Japan and the United States, with a market cap of ¥411.60 billion.
Operations: The company's revenue segments include ¥43.65 billion from the United States and ¥138.11 billion from Japan.
Estimated Discount To Fair Value: 43%