In October 2024, Japan's stock markets experienced a decline, with the Nikkei 225 Index and TOPIX Index both falling amidst easing domestic inflation and speculation about the Bank of Japan's interest rate strategy. As investors navigate these uncertain conditions, identifying growth companies with high insider ownership can be advantageous, as these stocks often demonstrate strong alignment between management interests and shareholder value.
Top 10 Growth Companies With High Insider Ownership In Japan
Overview: JTOWER Inc. offers infrastructure sharing services in Japan and has a market cap of ¥92.14 billion.
Operations: The company's revenue primarily comes from its Telecommunications Infrastructure Sharing Business, generating ¥13.15 billion.
Insider Ownership: 18.2%
Earnings Growth Forecast: 64.6% p.a.
JTOWER, a Japanese growth company with significant insider ownership, has seen recent developments including DigitalBridge's acquisition of a 75.62% stake and strategic alliances with KDDI for telecom infrastructure sharing. Despite its volatile share price and revised earnings guidance indicating increased losses, JTOWER is forecasted to achieve profitability within three years, outpacing average market growth. However, its revenue growth is expected to be moderate at 16% annually, below the ideal threshold for high-growth companies in Japan.
Overview: Optorun Co., Ltd. specializes in the manufacture, distribution, and import/export of vacuum coating machines and related products in Japan, with a market cap of ¥82.88 billion.
Operations: The company generates revenue primarily from its Film Deposition Equipment Business, amounting to ¥32.56 billion.
Insider Ownership: 10.6%
Earnings Growth Forecast: 27% p.a.
Optorun Ltd. is experiencing significant earnings growth, forecasted at 27% annually, surpassing the Japanese market's average. Despite slower revenue growth of 10.9%, it still exceeds the market rate. The company's recent share repurchase program aims to enhance capital efficiency and shareholder returns but has yet to execute any buybacks as of late September 2024. However, its return on equity is expected to remain modest at 13.8% in three years, and dividend sustainability is questionable due to inadequate free cash flow coverage.
Overview: Capcom Co., Ltd. is engaged in the planning, development, manufacturing, sale, and distribution of home video games, online games, mobile games, and arcade games both in Japan and internationally with a market cap of ¥1.35 trillion.
Operations: The company's revenue segments include Digital Content at ¥103.38 billion, Amusement Equipment at ¥10.34 billion, and Amusement Facilities at ¥20.09 billion.
Insider Ownership: 11.5%
Earnings Growth Forecast: 14.6% p.a.
Capcom is poised for growth with forecasted earnings increasing at 14.6% annually, outpacing the Japanese market average. Revenue growth is projected at 9.6%, slower than significant benchmarks but still above the market rate. The company enjoys a high forecasted return on equity of 20.3% in three years, although its share price has been highly volatile recently. There has been no substantial insider trading activity over the past three months to indicate shifts in insider sentiment.
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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.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include TSE:4485 TSE:6235 and TSE:9697.
