Japanese stock report - Marubeni

JAP

Marubeni in its biggest weekly gain in 2 months February 23, 2018 15:00 JST

NEWS BITES - JAPAN

Marubeni Corporation (TO:8002), the 6th largest Wholesale trade company by market cap in Japan, has increased JPY15.50 (1.9%) from its last trading session of February 22 to close at JPY814.50. Compared with the Nikkei 225 Index which rose 156.3 points (0.7%) in the day, the relative price increase was 1.2%. The volume was 0.8 times the average daily trading volume of 8.4 million shares. In the past week the shares have climbed 4.1%, the biggest weekly gain since December 21, 2017.

THE PAST QUARTER

Marubeni climbs 12% in past quarter, low P/E

Marubeni Corporation (TO:8002), has climbed JPY90.50 (or 12.5%) in the past quarter to close JPY814.50. Compared with the Nikkei 225 Index which fell 630.4 points (or 2.8%) in the past quarter, this represented a relative price increase of 15.3%. The volume was 0.9 times average trading per quarter of 512.8 million shares. The stock is trading at a price earnings multiple of 6.4 times. The P/E is 0.5 times the sector average of 12.8; and is the 2nd lowest in the Wholesale Trade sector.

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

Momentum, Moving Annual Return, Beta & Alpha, 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 6.4 multiplied by the P/NTA of 1 is 6.3. 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 3.2%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 2.5% is 129.7%. 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 50.5%.

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

+ Brandirectory have estimated Marubeni brand value at JPY495.2 billion (US$4.6 billion). The Brand Value represents an impressive 14.1% of the estimated Enterprise Value of JPY3,518.4 billion (US$32.9 billion).

+ As per the Du Pont analysis, Return on Equity of 9.0% is better than sector average of 8.4%. 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.

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 6.4 [12.8]. We estimate Marubeni stock is trading at a current year P/E of 5.9 and a forward year P/E of 3.8.

+ 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 0.9 and a forward year Price to Book of 0.7.

+ Dividend yield of 3.2% [2.6%].

+ Price to EBITDA of 6.1 [8.4].

1.3 Technicals:

Uptrend: The stock rose 1.9% on high volatility today and expanding price range.

+ The 5.8% discount to 12-month high of JPY865.0 against the 28.6% premium to 12-month low of JPY633.13 suggests the stock continues to push for new highs.

+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,160, comprising a capital gain of JPY119 and dividend reinvested of JPY41.

PV10001-week1-month1-year
8002.TO1,0419621,160
Nikkei 225 Index1,0089321,130

+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,867, including a capital gain of JPY1,323 and dividend reinvested of JPY544.

+ 30 years Multiplier in JPY = 2.867x

+ Compound Annual Growth Rate (CAGR) in JPY = 3.5%

Feb 23, 2018: USD 1 equals JPY 106.91

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverJPY5.7 billion (US$53.6 million)In Top 4%
Price to Sales0.2In Top 6%
EPS Growth %145.4In Top 7%
P/E * P/NTA6.28In Top 9%
Price Change %1.9In 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.

+ Net Profit margin is positive but falling in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Sep 17-3.5-5.52.8
Jun 17--2.8

2.2 Overvaluation [compared with sector average]:

+ Year-on-Year Earnings Growth of 145.4% [182.9%].

+ Return on Assets 2.3% [3.0%].

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

2.3 Technicals:

+ The price dropped 3.8% in the last month.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity1.6In Bottom 9%
Interest Cover7In Bottom Quartile
EBITDA Margin %3.3In Bottom Quartile
% Prem to Vol Wtd Price0.7In Bottom Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 7,030,000 shares worth JPY5.7 billion (US$53.6 million) traded today. In the past week, volume was 0.7 times average and the shares were up 4.1%. The volume was 0.8 times the average daily trading volume of 8.4 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 4 of the last 5 years. An investment a year ago in 8002 would have produced a return of 15.5%.

8002Close (JPY)Dividends (JPY)Capital Gain / (Loss) %% YieldAnnual Return %
Feb 23814.52611.93.615.5
1 Yr ago727.662028.93.532.5
2 Yrs ago564.3323.5(16.3)3.5(12.8)
3 Yrs ago674.4725.52.23.96.0
4 Yrs ago660.124.510.84.114.9

Close 5 years ago JPY595.79

3.3 Beta & Alpha:

+ 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.

+ Alpha: the Alpha of the stock is 0.1. The actual return of 9.65% exceeded the expected return of 9.5%, reflecting outperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 93.4% (or a turnover period of 1 year 26 days). This average length of ownership of the stock at 1.0 times the average holding period of 1 year 22 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 47,505 stocks] and Rank in the Asia Region [out of 22,573 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)13.3B1,205364
Total Assets (US$)64.6B735205
Revenue (US$)66.8B14249
Net Profit (US$)1.5B748180
Return on Equity %9.014,9328,081
Net Profit Margin %2.223,52613,759
Price to Book1.010,0315,768
Price/Earnings6.32,139830
Yield %3.28,0023,127
PV$1000 (1Year) US$*1,23215,7457,627
US$* Change (1Year) %16.416,1577,877

* 1 year ago USD 1 = JPY 113.44

Feb 23, 2018: USD 1 equals JPY 106.91

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 2073/3459 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 40.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 418,228 shares worth $US2,812,877 or 0.02% by value of the ETF's portfolio [Ranked 891 out of 7457 by value and 93 out of 1285 for Japan].

SECTION 5 MARUBENI FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)67.168.875.3
Pretax (USD)1.9B852.9M1.2B
Net (USD)1.5B586.4M994.6M
EPS (JPY)88.0635.8860.85

Net profit was up 149.5% from US$586.4 million in 2016 to US$1.5 billion in 2017. Earnings Per Share (EPS) was up 145.4% from JPY35.88 to JPY88.06.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (JPY)
23 Feb 201826
23 Feb 201720
23 Feb 201623.5
23 Feb 201525.5
23 Feb 201424.5

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 JPY1,417.2 billion (US$13.3 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

February 06: Marubeni: Consolidated Financial Results for the 3rd Quarter of FYE3/2018 and Yearly Forecasts for FYE3/2018(IFRS Basis)

February 06: Marubeni: Summary of Consolidated Financial Results For the Nine-month Period Ended December 31, 2017(IFRS basis)

February 06: Notice Regarding Revision of Dividend Forecast for the Fiscal Year Ending March 31, 2018

Marubeni Corporation ( referred to below as, "The Company" ) hereby announces that at the Board of Directors' Meeting held today it resolved to revise the dividend forecast for the fiscal year ending March 31, 201 8 ( From April 1, 201 7 to March 31, 201 8 ). Details of the revision are as follows

September 04 2017: Marubeni: Corporate Governance Report

August 03 2017: 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)

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