ARE Holdings, Inc. (5857) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Inabata & Co., Ltd.

Inaba Denkisangyo Co., Ltd.

Nagase & Co., Ltd.

Mitani Corp.

Taikisha Ltd.

Hanwa Co., Ltd.

Sangetsu Corp.

ARE Holdings, Inc.

Trusco Nakayama Corp.

Workman Co., Ltd.

Daiichikosho Co., Ltd.

Why is ARE Holdings, Inc. ?

High Management Efficiency with a high ROCE of 8.71%

High Debt Company with a Debt to Equity ratio (avg) at times

Poor long term growth as Operating profit has grown by an annual rate -0.25% of over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times

Poor long term growth as Operating profit has grown by an annual rate -0.25% of over the last 5 years

The company has declared Positive results for the last 3 consecutive quarters

NET SALES(HY) At JPY 270,362 MM has Grown at 50.69%
NET PROFIT(9M) At JPY 11,344 MM has Grown at 94.58%
ROCE(HY) Highest at 10.89%

With ROCE of 5.11%, it has a very attractive valuation with a 1.05 Enterprise value to Capital Employed

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 76.90%, its profits have risen by 68.1% ; the PEG ratio of the company is 0.2

Market Beating Performance

The stock has generated a return of 76.90% in the last 1 year, much higher than market (Japan Nikkei 225) returns of 29.35%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to ARE Holdings, Inc. should be less than 10%
Overall Portfolio exposure to Trading & Distributors should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Trading & Distributors)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is ARE Holdings, Inc. for you?

Low Risk, High Return

Absolute

Risk Adjusted

Volatility

ARE Holdings, Inc.

82.08%

1.53

31.39%

Japan Nikkei 225

28.54%

1.14

25.81%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

28.46%

EBIT Growth (5y)

-0.25%

EBIT to Interest (avg)

79.16

Debt to EBITDA (avg)

6.64

Net Debt to Equity (avg)

2.16

Sales to Capital Employed (avg)

1.11

Tax Ratio

33.27%

Dividend Payout Ratio

42.75%

Pledged Shares

Institutional Holding

ROCE (avg)

8.65%

ROE (avg)

14.47%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.15

EV to EBIT

20.52

EV to EBITDA

18.06

EV to Capital Employed

1.05

EV to Sales

0.83

PEG Ratio

0.15

Dividend Yield

ROCE (Latest)

5.11%

ROE (Latest)

11.33%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bullish

OBV

Mildly Bearish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

16What is working for the Company

NET SALES(HY)

At JPY 270,362 MM has Grown at 50.69%

NET PROFIT(9M)

At JPY 11,344 MM has Grown at 94.58%

ROCE(HY)

Highest at 10.89%

INVENTORY TURNOVER RATIO(HY)

Highest at 9.25%

RAW MATERIAL COST(Y)

Fallen by 1.51% (YoY

DEBTORS TURNOVER RATIO(HY)

Highest at 2.17%

-13What is not working for the Company

INTEREST COVERAGE RATIO(Q)

Lowest at 486.1

INTEREST(Q)

Highest at JPY 1,273 MM

Here's what is working for ARE Holdings, Inc.

Net Sales

At JPY 270,362 MM has Grown at 50.69%

Year on Year (YoY)

MOJO Watch

Near term sales trend is very positive

Net Sales (JPY MM)

Inventory Turnover Ratio

Highest at 9.25% and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Net Profit

At JPY 11,344 MM has Grown at 94.58%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

Debtors Turnover Ratio

Highest at 2.17%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Net Profit

Higher at JPY 11,344 MM

than preceding 12 month period ended Jun 2025

MOJO Watch

In the nine month period the company has already crossed sales of the previous twelve months

Net Profit (JPY MM)

Raw Material Cost

Fallen by 1.51% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for ARE Holdings, Inc.

Interest

At JPY 1,273 MM has Grown at inf%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Interest Coverage Ratio

Lowest at 486.1

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Interest

Highest at JPY 1,273 MM

in the last five periods and Increased by inf% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)