Japanese stock report - Marubeni

JAP

Marubeni rises for a second consecutive day, a two-day rise of 1.1% November 22, 2017 15:00 JST

NEWS BITES - JAPAN

Marubeni Corporation (TO:8002), the 6th largest Wholesale trade company by market cap in Japan, has risen JPY3.50 (0.5%) for a second consecutive day on Wednesday. This brought its two-day rise to JPY7.90 (1.1%), compared with the Nikkei 225 Index which rose 261.4 points (1.2%) in the two days for a relative price change of -0.1%. Cumulative volume in the 2 days was 0.5 times the average 2-day volume of 8.8 million shares. The stock last traded at JPY728.80.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, 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 & 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 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 relative yield of the stock, defined by its yield of 3.6%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 3.3% is 109.2%. 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 4% of stock by value of Q Ratio.

+ The company is cash rich with Cash to Market Capitalisation at 56.4%.

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

+ Brandirectory have estimated Marubeni brand value at JPY519.7 billion (US$4.6 billion). The Brand Value represents an impressive 15.4% of the estimated Enterprise Value of JPY3,369.3 billion (US$30 billion).

+ As per the Du Pont analysis, Return on Equity of 9.0% is better than sector average of 8.2%. 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 8.3 [13.0]. 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 [1.1]. 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.

+ Price to EBITDA of 5.4 [8.1].

1.3 Technicals:

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

+ The present value of JPY1,000 (PV1000) invested one year ago in Marubeni is JPY1,261, comprising a capital gain of JPY217 and dividend reinvested of JPY44.

PV10001-week1-month1-year
8002.TO9999661,261
Nikkei 225 Index1,0261,0231,240

+ The present value of JPY1,000 (PV1000) invested thirty years ago in Marubeni is JPY2,854, including a capital gain of JPY1,312 and dividend reinvested of JPY542.

+ 30 years Multiplier in JPY = 2.854x

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

Nov 22, 2017: USD 1 equals JPY 112.2

1.4 Oversold/Bullish/Support Signals:

+ The stock is oversold according to the Williams % R indicator of -88.7, suggesting the price is close to its 14-day low of JPY720.70.

+ The Stochastic indicator of 4.5 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

1.5 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverJPY3.6 billion (US$32.3 million)In Top 3%
EPS Growth %145.4In Top 4%
Price to Sales0.2In Top 5%
P/E * P/NTA7.2In Top 10%
Volatility %0.8In 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% [175.4%].

+ Return on Assets 2.3% [2.8%].

+ Return on Capital Employed 5.5% [6.7%].

2.3 Technicals:

+ The price dropped 3.4% in the last month. Volume traded for the month was about average.

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

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 4,980,000 shares worth JPY3.6 billion (US$32.3 million) traded today. In the past week, volume was 0.7 times average and the shares were down 0.1%. The volume was 0.6 times the average daily trading volume of 8.8 million shares.

+ Marubeni is at a discount of 8.0% to its 12-month high of JPY792.30 on November 06. It is also at a premium of 19.6% to the 12-month low of JPY609.22 on November 24, 2016.

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 26.0%.

8002Close (JPY)Dividends (JPY)Capital Gain / (Loss) %% YieldAnnual Return %
Nov 22728.82621.74.326.0
1 Yr ago598.9920(12.3)2.9(9.4)
2 Yrs ago683.223.50.83.54.2
3 Yrs ago678.0225.5(0.6)3.73.1
4 Yrs ago682.1324.543.15.148.3

Close 5 years ago JPY476.63

3.3 Beta & Alpha:

+ Beta: the Beta of Marubeni stock is 0.9. 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 -1.5. The actual return of 22.59% fell short of the expected return of 24.1%, reflecting underperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 106.4% (or a turnover period of 11 months). This average length of ownership of the stock at 0.8 times the average holding period of 1 year 44 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 47,950 stocks] and Rank in the Asia Region [out of 22,361 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)11.3B2,216433
Total Assets (US$)61.3B746213
Revenue (US$)63.4B14649
Net Profit (US$)1.4B755182
Return on Equity %9.014,7257,874
Net Profit Margin %2.223,45313,515
Price to Book0.98,5915,005
Price/Earnings8.23,1771,448
Yield %3.67,0652,706
PV$1000 (1Year) US$*1,24616,8987,887
US$* Change (1Year) %20.217,4618,219

* 1 year ago USD 1 = JPY 110.98

Nov 22, 2017: USD 1 equals JPY 112.2

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 1960/3409 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 43.

SECTION 5 MARUBENI FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)63.164.670.7
Pretax (USD)1.8B801.2M1.1B
Net (USD)1.4B550.8M934.3M
EPS (JPY)88.0635.8860.85

Net profit was up 149.5% from US$550.8 million in 2016 to US$1.4 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)
22 Nov 201726
22 Nov 201620
22 Nov 201523.5
22 Nov 201425.5
22 Nov 201324.5

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 and the chief executive officer is Fumiya Kokubu.

6.3 Issued Capital

Based on 1,740,000,000 issued shares the market capitalisation is JPY1,268.1 billion (US$11.3 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