Japanese stock report - Marubeni
Marubeni falls for a third consecutive day, a three-day fall of 1.1% July 25, 2017 15:00 JST
NEWS BITES - JAPAN
Marubeni Corporation (TO:8002), the 5th largest Wholesale trade company by market cap in Japan, has fallen 20.0 sen (0.03%) for a third consecutive day on Tuesday. This brought its three-day fall to JPY8.20 (1.1%), compared with the Nikkei 225 Index which fell 189.4 points (0.9%) in the three days for a relative price change of -0.2%. Cumulative volume in the 3 days was 0.4 times the average 3-day volume of 8.6 million shares. The stock last traded at JPY729.40.
MARUBENI BEARISH SIGNALS
+ 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.
1.2 Overvaluation [compared with sector average]:
+ Year-on-Year Earnings Growth of 145.4% [164.9%].
+ Return on Assets 2.3% [2.8%].
+ Return on Capital Employed 5.5% [6.8%].
+ The price decreased 0.9% in the last week.
+ Compared with the Nikkei 225 Index which fell 0.2% for the week, this represented a relative price decrease for Marubeni stock of 0.6% for the week.
1.4 Low Performance Indicators:
|Description||Value||Rank In Market|
|EBITDA Margin %||3.3||In Bottom Quartile|
|Interest Cover||7||In Bottom Quartile|
|Total Debt to Equity||1.6||In Bottom Quartile|
MARUBENI BULLISH SIGNALS
+ The P/E of 8.3 multiplied by the P/NTA of 0.9 is 7.2. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
+ The earnings yield of 12.1% has a spread of 12.0% vs the 10-year treasury yield of 0.1%. This is the widest and most attractive spread in the past month.
+ 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 162.4%. 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 56.3%.
+ Interest cover defined by EBIT/I is 7 times. This indicates it is less leveraged.
+ Brandirectory have estimated Marubeni brand value at JPY524.3 billion (US$4.6 billion). The Brand Value represents an impressive 15.6% of the estimated Enterprise Value of JPY3,370.3 billion (US$29.8 billion).
+ As per the Du Pont analysis, Return on Equity of 9.0% is better than sector average of 8.0%. 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.
2.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 8.3 [11.7]. We estimate Marubeni stock is trading at a current year P/E of 5.3 and a forward year P/E of 3.4.
+ 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 [1.0]. 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.
+ Return on Equity 9.0% [8.0%].
+ Dividend yield of 3.1% [2.5%].
+ Price to EBITDA of 5.4 [7.2].
+ The 2.5% discount to 12-month high of JPY748.0 against the 60.2% premium to 12-month low of JPY455.18 suggests the stock continues to push for new highs.
+ In the last three months the stock has hit a new 52-week high twice.
+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,554, comprising a capital gain of JPY496 and dividend reinvested of JPY58.
|Nikkei 225 Index||998||996||1,201|
+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,468, including a capital gain of JPY1,001 and dividend reinvested of JPY467.
+ 30 years Multiplier in JPY = 2.468x
+ Compound Annual Growth Rate (CAGR) in JPY = 3.0%
Jul 25, 2017: USD 1 equals JPY 113.2
2.4 Oversold/Bullish/Support Signals:
+ The stock is oversold according to the Williams % R indicator of -84.9, suggesting the price is close to its 14-day low of JPY726.10.
2.5 High Performance Indicators:
|Description||Value||Rank In Market|
|EPS Growth %||145.4||In Top 3%|
|Today's Turnover||JPY2.8 billion (US$24.5 million)||In Top 4%|
|Price to Sales||0.2||In Top 6%|
|P/E * P/NTA||7.2||In Top Quartile|
|Volatility %||0.6||In Top Quartile|
PRICE VOLUME DYNAMICS
+ Volume: there were 3,810,000 shares worth JPY2.8 billion (US$24.5 million) traded today. In the past week, volume was 0.5 times average and the shares were down 0.9%. The volume was 0.4 times the average daily trading volume of 8.6 million shares.
3.2 Moving Annual Return
|8002||Close (JPY)||Dividends (JPY)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||487.47||21||(24.8)||3.2||(21.5)|
|2 Yrs ago||647.93||26||(4.5)||3.8||(0.6)|
|3 Yrs ago||678.29||25||0.6||3.7||4.3|
|4 Yrs ago||674.23||24||51.7||5.4||57.1|
3.3 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 101.9% (or a turnover period of 11 months). This average length of ownership of the stock at 0.9 times the average holding period of 1 year 22 days for stocks in the Nikkei 225 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
4.1 Global Rank [out of 47,591 stocks] and Rank in the Asia Region [out of 22,099 stocks]
|Description||Value||Global Rank||In Asia Region|
|Total Assets (US$)||60.9B||712||203|
|Net Profit (US$)||1.4B||741||181|
|Return on Equity %||9.0||14,258||7,559|
|Net Profit Margin %||2.2||22,700||12,879|
|Price to Book||0.9||8,850||4,882|
|PV$1000 (1Year) US$*||1,457||8,922||4,260|
|US$* Change (1Year) %||39.8||9,284||4,430|
* 1 year ago USD 1 = JPY 106.13
Jul 25, 2017: USD 1 equals JPY 113.2
4.2 Independent Ratings
Marubeni Corporation is the 103rd largest by revenue in the Forbes Global 2000.
It is placed 988/3415 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 71.
5.1 Financials Summary
|Year ended||Mar 2017||Mar 2016||Mar 2015|
|Sales (USD B)||63||64.5||70.6|
5.2 Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-
Marubeni Net Profit up 150%
+ EBIT Margin up from 1.7% to 3.3%.
+ Interest cover up 90% from 3.7 to 7.0.
+ EBIT to total assets up from 1.7% to 3.4%.
+ Sales and marketing expenses to Sales down from 7.8% to 7.3%.
+ Profit before tax to Sales up from 1.2% to 2.8%.
+ Debt to Equity down 32.4% from 2.4 to 1.6.
+ Retained earnings to total assets up from 10.4% to 12.4%.
+ Total current assets to Total Assets up from 44.4% to 45.9%.
+ Long-term investments to Total Assets up from 23.2% to 25.5%.
+ Net tangible assets per share up 34.6% from JPY622.31 ($US5.5) to JPY837.54 ($US7.5).
+ Total non-current assets to Total Assets down from 55.6% to 54.1%.
+ Fixed Assets to Total Assets down from 16.9% to 14%.
+ Total Liabilities to EBITDA of 22.1 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 52% from the previous year's ratio of 45.9.
+ Total revenue to total assets steady at 1.0.
+ Tax expenses to Sales up from 0.3% to 0.6%.
+ Total liabilities to Total assets steady at 0.8.
+ Current ratio steady at 1.2.
+ Working capital to total assets steady at 7.9%.
+ Current Inventory to Total Assets up from 11% to 11.1%.
5.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (JPY)|
|25 Jul 2017||23|
|25 Jul 2016||21|
|25 Jul 2015||26|
|25 Jul 2014||25|
|25 Jul 2013||24|
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 JPY1,269.2 billion (US$11.2 billion).
To view Recent Company Headlines, click here
June 02: Marubeni announces AGM
May 12: Marubeni announces dividend
May 09: Marubeni: Summary of Consolidated Financial Results For the Fiscal Year Ended March 31, 2017 (IFRS Basis)
May 09: Marubeni: Notice Regarding Revision of Dividend Forecasts for the Fiscal Year Ended March 31, 2017
May 09: Marubeni: Consolidated Financial Results for FYE 3/2017 and Yearly Prospects for FYE 3/2018(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
TO:8002; TYO:8002; T:8002; JP:8002; 8002.T