Japanese stock report - Marubeni
Marubeni increases 1.8% August 17, 2018 15:00 JST
NEWS BITES - JAPAN
Marubeni Corporation (TO:8002), the 5th largest Wholesale trade company by market cap in Japan, has increased JPY16.40 (1.8%) from its last trading session of August 16 to close at JPY908.30. Compared with the Nikkei 225 Index which rose 78.3 points (0.3%) in the day, the relative price increase was 1.5%. The volume was 0.8 times the average daily trading volume of 6.8 million shares. Its MCap is JPY1,580.4 billion (US$14.3 billion).
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
SECTION 2 BEARISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 MARUBENI BULLISH SIGNALS
Uptrend: The stock rose 1.8% on high volatility today and expanding price range.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 898.27 minus the 26-day EMA of 884.58 is positive 13.7 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ The 2.0% discount to 12-month high of JPY927.0 against the 36.6% premium to 12-month low of JPY665.09 suggests the stock continues to push for new highs.
+ In the last three months the stock has hit a new 52-week high seven times, pointing to a significant uptrend.
+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,390, comprising a capital gain of JPY346 and dividend reinvested of JPY45.
|Nikkei 225 Index||999||986||1,130|
+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,547, including a capital gain of JPY1,078 and dividend reinvested of JPY469.
+ 30 years Multiplier in JPY = 2.547x
+ Compound Annual Growth Rate (CAGR) in JPY = 3.1%
Aug 17, 2018: USD 1 equals JPY 110.88
High Performance Indicators and rank of Marubeni in the Japan market:
|Description||Value||Rank In Market|
|Today's Trading Turnover||JPY4.7 billion (US$42.7 million)||In Top 4%|
|Price to Sales||0.2||In Top 8%|
|Price/MAP50||1.05||In Top Quartile|
|Price/MAP200||1.12||In Top Quartile|
|P/E * P/NTA||7.15||In Top Quartile|
|Price Change %||1.8||In Top Quartile|
+ The P/E of 6.7 multiplied by the P/NTA of 1.1 is 7.1. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
+ The relative yield of Marubeni, defined by its yield of 2.8%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 2.5% is 110.9%. This suggests Marubeni stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued and ranks in the top 9% of stock by value of Q Ratio.
+ Marubeni is cash rich with Cash to Market Capitalisation at 13.6%.
+ Interest cover defined by EBIT/I is 8.3 times. This indicates it is less leveraged.
+ Brandirectory have estimated Marubeni's brand value at JPY513.6 billion (US$4.6 billion). The Brand Value represents an impressive 12.3% of the estimated Enterprise Value of JPY4,187.3 billion (US$37.8 billion).
+ As per the Du Pont analysis, Return on Equity [ROE] of 12.5% is better than sector average of 11.4%. ROE is computed as net profit margin of 2.9% times asset turnover [sales/assets] of 1.1 times leverage factor [total assets/shareholders' equity] of 3.9.
Quarterly Trend in Revenue, Net Profit and Net Profit Margin:
+ Net Profit margin is positive and has seen consecutive rises in recent quarters. [All figures in %]
|Qtr-ended||Revenue Growth||Net Profit Growth||Net Profit Margin|
|Jun 18 [Q1]||21.3||86.9||4.1|
|Mar 18 [Q4]||-9.4||-22.9||2.6|
1.3 Undervaluation [compared with sector average]:
+ Price/Earnings of 6.7 [9.0]. We estimate Marubeni stock is trading at a current year P/E of 3.9 and a forward year P/E of 2.
+ Price/Sales of 0.2 [0.3]. We estimate Marubeni stock is trading at a current year Price/Sales of 0.2 and a forward year Price/Sales of 0.2.
+ Return on Equity 12.5% [11.4%].
SECTION 2 MARUBENI BEARISH SIGNALS
+ The price decreased 0.3% in the last week.
+ Compared with the Nikkei 225 Index which fell 0.1% for the week, this represented a relative price decrease for Marubeni's stock of 0.2% for the week.
Low Performance Indicators and rank of Marubeni in the Japan market:
|Description||Value||Rank In Market|
|Total Debt to Equity||1.4||In Bottom Quartile|
|Interest Cover||8.3||In Bottom Quartile|
|EBITDA Margin %||3.8||In Bottom Quartile|
+ Total Liabilities/EBITDA of 17.4 which compares unfavourably with the Joseph Piotroski benchmark of 5.
+ Net profit margin has averaged 2% in the last 3 years. This suggests the company is less profitable with a low margin of safety.
2.3 Overvaluation [compared with sector average]:
+ Return on Assets 3.1% [3.6%].
+ Return on Capital Employed 7% [8.4%].
SECTION 3 MARUBENI PRICE VOLUME DYNAMICS
+ Volume: there were 5,210,000 shares worth JPY4.7 billion (US$42.7 million) traded today. In the past week, volume was 0.8 times average and the shares were down 0.3%.
3.2 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 86.99% (or a turnover period of 1 year 55 days). This average length of ownership of the stock at 1.1 times the average holding period of 1 year 4 days for stocks in the Nikkei 225 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
3.3 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in Marubeni would have produced a return of 38.3%.
|TO:8002||Close (JPY)||Dividends (JPY)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||675.06||23||47||5||52.0|
|2 Yrs ago||459.25||21||(32.6)||3.1||(29.5)|
|3 Yrs ago||681.39||26||1.3||3.9||5.1|
|4 Yrs ago||672.91||25||1.1||3.8||4.8|
Close 5 years ago JPY665.88
+ Beta: the Beta of Marubeni stock is 0.8. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
+ Marubeni Corporation (TO:8002), climbed JPY105.39 (or 13.1%) year-to-date (YTD) in 2018 to close at JPY908.30 today. The stock has a 6-month USD relative strength of 87 which means in USD terms it is outperformed 87% of its 47,645 global peers. A price rise combined with a high relative strength is a bullish signal. Compared with the Nikkei 225 Index which has fallen 2.2% YTD, this is a relative price increase of 15.3%.
SECTION 4 MARUBENI RELATED NEWS
+ BSS/News Bites:
Marubeni Corporation is placed 514/3455 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 85.
+ Vanguard Total World Stock ETF 2588:
The stock was one of 2588 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 480,128 shares in the period May 31, 2018 to Jun 30, 2018 worth $US-412,168,505 at an estimated Volume Weighted Average Price (VWAP) of $US858.4555. As at Jun 30, 2018, the Vanguard Total World Stock ETF held 0 shares worth $US0 or 537,628% by value of the ETF's portfolio [Ranked 2014 out of 2588 by value and 258 out of 308 for Japan].
SECTION 5 MARUBENI GLOBAL RANKING
Global Rank [out of 47,645 stocks] and Rank of Marubeni in the Asia Region [out of 22,904 stocks]
|Description||Value||Global Rank||In Asia Region|
|Total Assets (US$)||62B||765||217|
|Net Profit (US$)||1.9B||623||163|
|Return on Equity %||12.5||10,216||5,279|
|Net Profit Margin %||2.9||22,614||13,144|
|Price to Book||1.1||13,078||7,820|
|PV$1000 (1Year) US$*||1,389||5,753||2,394|
|US$* Change (1Year) %||33.0||6,007||2,533|
* 1 year ago USD 1 = JPY 109.42
Aug 17, 2018: USD 1 equals JPY 110.88
SECTION 6 MARUBENI SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has unchanged from JPY25.0 in 2014 to JPY25.0 in 2018.
6.2 Financials Summary (Past 3 years)
|Year ended||Mar 2018||Mar 2017||Mar 2016|
|Sales (USD B)||70||65.9||65.9|
+ Sales were up 6.3% from US$65.9 billion in 2017 to US$70 billion in 2018.
+ Net profit was up 36% from US$1.4 billion in 2017 to US$1.9 billion in 2018.
SECTION 7 MARUBENI PROFILE
Marubeni is a Japan-based trading company. It has 13 business divisions: Food, which produces and sells grains, sugar and processed food; Textile, including the planning, proposal, sale and logistics of apparel products; Material and Paper Pulp, which sells rubber products, footwear and paper; Chemical Product, which offers electronic materials and agrochemicals; Energy, such as the development of petroleum and gases; Metal Material, including the manufacture and sale of nonferrous light metals; Transportation and Industrial Machines, including the wholesale and retail of transportation-related and manufacturing equipment; Plant, Infrastructure and Ship, including the delivery and engineering of industrial plants and infrastructure-related machines; Information, which sells computers and others; Development and Construction, which operates real estate; Finance, Logistics and Others, including the operation of funds, and Steel, such as the production of steel products.
7.2 Top Management
The chairman is Teruo Asada.
7.3 Issued Capital
Based on 1,740,000,000 issued shares the market capitalisation is JPY1,580.4 billion (US$14.3 billion).
Contact: 81 33 28 22 31 3
Physical Address: 1-4-2 Otemachi Chiyoda-ku Tokyo, 100-8088 Japan
State/Province/Country: TKY, Japan
Country of Incorporation: Japan
Exchange: Tokyo Stock Exchange
TO:8002; TYO:8002; T:8002; JP:8002; 8002.T