Japanese stock report - Marubeni

JAP

Marubeni in 3rd consecutive rise, nears a 52-month high September 20, 2017 15:00 JST

NEWS BITES - JAPAN

Marubeni Corporation (TO:8002), the 5th largest Wholesale trade company by market cap in Japan, extended its gains on Wednesday, rising an additional JPY7.40 (1.0%) to trade at JPY750.30. The stock increased 0.8% on Friday and 0.7% on Tuesday. This brought its 3-day rise to 2.5%, compared with the Nikkei 225 Index which rose 503.0 points (2.5%) in the three days for a relative price change of -0.03%. Cumulative volume in the 3 days was 1.1 times the average 3-day volume of 8.6 million shares. The stock is now approaching its thirty-seven-month high of JPY750.70.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

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

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, 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 BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 6.2 multiplied by the P/NTA of 0.9 is 5.6. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of the stock, defined by its yield of 3.1%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 1.9% is 161.6%. This suggests the 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 5% of stock by value of Q Ratio.

+ The company is cash rich with Cash to Market Capitalisation at 54.8%.

+ Interest cover defined by EBIT/I is 7 times. This indicates it is less leveraged.

+ Brandirectory have estimated Marubeni brand value at JPY516.8 billion (US$4.6 billion). The Brand Value represents an impressive 15.2% of the estimated Enterprise Value of JPY3,406.7 billion (US$30.5 billion).

+ As per the Du Pont analysis, Return on Equity of 9.0% is better than sector average of 8.3%. This is computed as net profit margin of 2.2% times asset turnover [sales/assets] of 1.0 times leverage factor [total assets/shareholders' equity] of 4.0.

+ Net Profit margin is positive and has seen consecutive rises in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Jun 17--2.8
Mar 179.275.42.4
Dec 1611-15.41.6

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 6.2 [12.1]. We estimate Marubeni stock is trading at a current year P/E of 5.4 and a forward year P/E of 3.5.

+ 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.

+ Price to Book of 0.9 [1.1]. We estimate Marubeni stock is trading at a current year Price to Book of 0.8 and a forward year Price to Book of 0.7.

+ Dividend yield of 3.1% [2.4%].

+ Price to EBITDA of 5.6 [7.7].

1.3 Technicals:

+ The price lifted 2.4% in the last week and jumped 8.1% in the last month.

+ Compared with the Nikkei 225 Index which rose 2.2% for the week and 4.3% for the month, this represented a relative price increase for Marubeni stock of 0.2% for the week and 3.7% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 730.15 minus the 26-day EMA of 720.8 is positive 9.36 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 14:8 or 1.8:1.

+ In the last three months the stock has hit a new 52-week high thrice.

+ The stock's relative price strength percentile is rising at 41 for 6 months, 64 for 3 months and 77 for 1 month.

+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,560, comprising a capital gain of JPY502 and dividend reinvested of JPY58.

PV10001-week1-month1-year
8002.TO1,0241,0801,560
Nikkei 225 Index1,0221,0491,232

+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,539, including a capital gain of JPY1,059 and dividend reinvested of JPY480.

+ 30 years Multiplier in JPY = 2.539x

+ Compound Annual Growth Rate (CAGR) in JPY = 3.1%

Sep 20, 2017: USD 1 equals JPY 111.58

1.4 High Performance Indicators:

DescriptionValueRank In Market
EPS Growth %145.4In Top 3%
Today's TurnoverJPY6.8 billion (US$60.8 million)In Top 4%
Price to Sales0.2In Top 6%
P/E * P/NTA5.57In Top 7%
Price Change %1.0In Top Quartile

SECTION 2 MARUBENI BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 22.1 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 1.5% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

2.2 Overvaluation [compared with sector average]:

+ Year-on-Year Earnings Growth of 145.4% [174.4%].

+ Return on Assets 2.3% [2.9%].

+ Return on Capital Employed 5.5% [6.8%].

2.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 81.1 has penetrated the overbought line of 70, suggesting the price gain of 4.9% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -0.9, suggesting the price is close to its 14-day high of JPY750.70.

+ The Money Flow Index [MFI] is 80.3 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 4.1 suggests positive money flow was 4.1 times negative money flow.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
EBITDA Margin %3.3In Bottom Quartile
Interest Cover7In Bottom Quartile
Total Debt to Equity1.6In Bottom Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 9,040,000 shares worth JPY6.8 billion (US$60.8 million) traded today. In the past week, volume was 0.9 times average and the shares were up 2.4%. The rise has been propped up by average volume of 1.1 times the average daily volume of 8.6 million shares.

+ The Marubeni is at a discount of 0.1% to its 12-month high of JPY750.70 traded on September 20.

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 54.8%.

8002Close (JPY)Dividends (JPY)Capital Gain / (Loss) %% YieldAnnual Return %
Sep 20750.32350.24.654.8
1 Yr ago499.6521(20.7)3.3(17.4)
2 Yrs ago630.0726(15.2)3.5(11.7)
3 Yrs ago742.692533.56.5
4 Yrs ago721.082451.5556.5

Close 5 years ago JPY476.11

3.3 Beta:

+ Beta: the Beta of Marubeni stock is 1.1. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 100.5% (or a turnover period of 11 months). This average length of ownership of the stock at 0.9 times the average holding period of 1 year 29 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 RANKING

4.1 Global Rank [out of 47,638 stocks] and Rank in the Asia Region [out of 22,181 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)11.7B1,277382
Total Assets (US$)61.8B736208
Revenue (US$)63.9B14548
Net Profit (US$)1.4B753180
Return on Equity %9.014,5027,721
Net Profit Margin %2.223,18813,280
Price to Book0.99,3445,273
Price/Earnings6.12,022736
Yield %3.18,0963,128
PV$1000 (1Year) US$*1,4309,3694,522
US$* Change (1Year) %37.19,9984,828

* 1 year ago USD 1 = JPY 101.76

Sep 20, 2017: USD 1 equals JPY 111.58

4.2 Independent Ratings

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

It is placed 1168/3418 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 66.

SECTION 5 MARUBENI FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)64.766.272.5
Pretax (USD)1.8B821.3M1.1B
Net (USD)1.4B564.7M957.7M
EPS (JPY)88.0635.8860.85

Net profit was up 47.1% from US$957.7 million to US$1.4 billion and EPS was up 44.7% from JPY60.85 to JPY88.06.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (JPY)
20 Sep 201723
20 Sep 201621
20 Sep 201526
20 Sep 201425
20 Sep 201324

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 and the chief executive officer is Fumiya Kokubu.

6.3 Issued Capital

Based on 1,740,000,000 issued shares the market capitalisation is JPY1,305.5 billion (US$11.7 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

September 04: Marubeni: Corporate Governance Report

August 03: Marubeni: Summary of Consolidated Financial Results For the Three-month Period Ended June 30, 2017 (IFRS basis)

Marubeni: Summary of Consolidated Financial Results For the Three-month Period Ended June 30, 2017 (IFRS basis)

August 02: Marubeni: Consolidated Financial Results for the 1st Quarter of FYE 3/2018 (IFRS Basis)

Marubeni: Consolidated Financial Results for the 1st Quarter of FYE 3/2018 (IFRS Basis)

June 02: Marubeni announces AGM

Marubeni has announced its Annual General Meeting will take place on Friday, June 23.

May 12: Marubeni announces dividend

Marubeni today announced a final dividend of JPY13.50 per share. The record date is Friday, March 31, 2017 and it is payable on Friday, June 02.

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

Marubeni Corp

Source: www.BuySellSignals.com