Japanese stock report - Marubeni

JAP

Marubeni keeps sliding, down 4% in 3 days May 25, 2018 15:00 JST

NEWS BITES - JAPAN

Marubeni Corporation (TO:8002), the 5th largest Wholesale trade company by market cap in Japan, extended its slide on Friday, shedding an additional JPY3.60 (0.4%) to close at JPY853.60. Marubeni's stock have sunk JPY39.50 (4.4%) over the past three trading days, compared with the Nikkei 225 Index which fell 509.6 points (2.2%) in the three days for a relative price change of -2.2%. Cumulative volume in the 3 days was 0.9 times the average 3-day volume of 7.1 million shares.

THE PAST TWO YEARS

Marubeni rises for a second consecutive year, a two-year rise of 75%

Marubeni Corporation (TO:8002), extended its gains in the past year, rising an additional JPY185.50 (27.8%) to close at JPY853.60. In the previous year the shares rose JPY179.20 (36.7%). The shares have lifted JPY364.71 (74.6%) over the past two years, compared with the Nikkei 225 Index which rose 5,693.4 points (34.0%) in the two years for a relative price increase of 40.6%.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Technicals, Low Performance Indicators

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Momentum, Moving Annual Return, Beta, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Top Management, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 MARUBENI BEARISH SIGNALS

1.1 Marubeni Fundamentals:

+ 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.

+ Revenue and Net Profit growth have shown signs of deterioration in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Mar 18-9.4-22.92.6
Dec 176.418.53.1

1.2 Marubeni Technicals:

+ The price dropped 3.1% in the last week.

+ Compared with the Nikkei 225 Index which fell 2.1% for the week, this represented a relative price decrease for Marubeni's stock of 1.1% for the week.

1.3 Marubeni Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity1.4In Bottom Quartile
Interest Cover8.3In Bottom Quartile

SECTION 2 MARUBENI BULLISH SIGNALS

2.1 Marubeni Fundamentals:

+ The P/E of 7.4 multiplied by the P/NTA of 1 is 7.4. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of Marubeni, defined by its yield of 4.5%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 3.2% is 140.9%. 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 6% of stock by value of Q Ratio.

+ Marubeni is cash rich with Cash to Market Capitalisation at 14.5%.

+ Interest cover defined by EBIT/I is 8.3 times. This indicates it is less leveraged.

+ Brandirectory have estimated Marubeni's brand value at JPY507.3 billion (US$4.6 billion). The Brand Value represents an impressive 12.4% of the estimated Enterprise Value of JPY4,092.1 billion (US$37.4 billion).

+ As per the Du Pont analysis, Return on Equity of 12.5% is better than sector average of 9.0%. This 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.

2.2 Marubeni Undervaluation [compared with sector average]:

+ Price/Earnings of 7.4 [12.2].

+ Price/Sales of 0.2 [0.4]. We estimate Marubeni stock is trading at a current year Price/Sales of 0.2 and a forward year Price/Sales of 0.2.

+ Price to Book of 1 [1.2]. We estimate Marubeni stock is trading at a current year Price to Book of 0.8 and a forward year Price to Book of 0.6.

+ Return on Equity 12.5% [8.9%].

+ Dividend yield of 4.5% [3.9%].

+ Price to EBITDA of 5.1 [7.7].

2.3 Marubeni Technicals:

+ The 4.6% discount to 12-month high of JPY895.10 against the 31.1% premium to 12-month low of JPY651.25 suggests the stock continues to push for new highs.

+ In the last three months the stock has hit a new 52-week high six times, pointing to an uptrend.

+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,347, comprising a capital gain of JPY278 and dividend reinvested of JPY69.

PV10001-week1-month1-year
8002.TO9691,0311,347
Nikkei 225 Index9799991,133

+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,439, including a capital gain of JPY990 and dividend reinvested of JPY449.

+ 30 years Multiplier in JPY = 2.439x

+ Compound Annual Growth Rate (CAGR) in JPY = 3.0%

May 25, 2018: USD 1 equals JPY 109.53

2.4 Marubeni High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverJPY4.7 billion (US$43 million)In Top 5%
Price to Sales0.2In Top 7%
P/E * P/NTA7.36In Top Quartile
Price/MAP501.06In Top Quartile
Price/MAP2001.12In Top Quartile

SECTION 3 MARUBENI PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 5,520,000 shares worth JPY4.7 billion (US$43 million) traded today. In the past week, volume was 0.9 times average and the shares were down 3.1%. The volume was 0.8 times the average daily trading volume of 7.1 million shares.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in 8002 would have produced a return of 33.5%.

8002Close (JPY)Dividends (JPY)Capital Gain / (Loss) %% YieldAnnual Return %
May 25853.638.527.85.833.5
1 Yr ago668.12039.64.243.8
2 Yrs ago478.5410.5(29.5)1.5(27.9)
3 Yrs ago678.68268.64.212.7
4 Yrs ago625.0425(7.6)3.7(3.9)

Close 5 years ago JPY676.54

3.3 Beta:

+ Beta: the Beta of Marubeni stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 92.1% (or a turnover period of 1 year 33 days). This average length of ownership of the stock at 1.0 times the average holding period of 1 year 26 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.

SECTION 4 MARUBENI RANKING

4.1 Global Rank [out of 47,755 stocks] and Rank in the Asia Region [out of 22,786 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)13.6B1,113324
Total Assets (US$)64.9B747205
Revenue (US$)67.1B14449
Net Profit (US$)1.5B788185
Return on Equity %9.015,0328,137
Net Profit Margin %2.223,67313,815
Price to Book0.99,9855,818
Price/Earnings6.12,075826
Yield %5.04,6861,681
PV$1000 (1Year) US$*1,3727,7033,862
US$* Change (1Year) %18.014,4336,915

* 1 year ago USD 1 = JPY 111.83

May 25, 2018: USD 1 equals JPY 109.53

4.2 Independent Ratings

+ Fortune 500:

Marubeni Corporation was ranked 116 by total revenues in the Fortune 500 annual list for 2017; an improvement over a year from rank 138 in 2016.

+ Forbes 2000:

It is the 103rd largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 1170/3491 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 67.

+ Vanguard Total World Stock ETF 7517:

The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 12,400 shares in the period Nov 30, 2017 to Jan 31, 2018 worth $US10,480,564 at an estimated Volume Weighted Average Price (VWAP) of $US845.2068. As at Jan 31, 2018, the Vanguard Total World Stock ETF held 430,628 shares worth $US3,333,599 or 0.02% by value of the ETF's portfolio [Ranked 864 out of 7517 by value and 86 out of 1306 for Japan].

SECTION 5 MARUBENI FINANCIALS

5.1 Financials Summary

Year endedMar 2018Mar 2017Mar 2016
Sales (USD B)69.765.665.6
Pretax (USD)2.3B1.8B814.2M
Net (USD)1.9B1.4B559.8M
EPS (JPY)--35.88

Sales were up 6.3% from US$65.6 billion in 2017 to US$69.7 billion in 2018. Net profit was up 36% from US$1.4 billion in 2017 to US$1.9 billion in 2018.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (JPY)
25 May 201838.5
25 May 201720
25 May 201610.5
25 May 201526
25 May 201425

SECTION 6 MARUBENI PROFILE

6.1 Activities

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.

6.2 Top Management

The chairman is Teruo Asada.

6.3 Issued Capital

Based on 1,740,000,000 issued shares the market capitalisation is JPY1,485.3 billion (US$13.6 billion).

SECTION 7 MARUBENI STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

May 08: Marubeni: Summary of Consolidated Financial Results For the Fiscal Year Ended March 31, 2018 (IFRS basis)

May 08: Marubeni: Notice Concerning Differences between Financial Results for FY2017 and FY2016

Marubeni Corporation hereby announces differences between its financial results for FY2017 (fiscal year ended March 31, 2018) and FY2016 (fiscal year ended March 31, 2017).

1. Differences between actual financial results for FY2017 and FY2016.

May 08: Marubeni: Consolidated Financial Results for FYE 3/2018 and Yearly Forecasts for FYE 3/2019 (IFRS Basis)

April 11: Marubeni: Corporate Governance Report

April 11: Marubeni: Corporate Governance Report

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views

The officers and employees of the Marubeni Group shall comply with laws, regulations and internal rules in accordance with the spirit grounded in Marubeni's company creed "Fairness, Innovation, and Harmony" as well as the Marubeni Corporate Principles and engage in corporate activities conforming to business ethics and the Marubeni Management Philosophy and endeavor to enhance corporate governance.

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

ISIN: JP3877600001

TO:8002; TYO:8002; T:8002; JP:8002; 8002.T

RIC: 8002.T

Marubeni Corp

Source: www.BuySellSignals.com