Howa Machinery, Ltd. (6203) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Yamada Corp.

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Kanefusa Corp.

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Nakakita Seisakusho Co., Ltd.

Punch Industry Co., Ltd.

Daiki Axis Co., Ltd.

Mutoh Holdings Co., Ltd.

Howa Machinery, Ltd.

A-One Seimitsu, Inc.

Why is Howa Machinery, Ltd. ?

Poor Management Efficiency with a low ROE of 4.14%

The company has been able to generate a Return on Equity (avg) of 4.14% signifying low profitability per unit of shareholders funds

Weak Long Term Fundamental Strength with a 5.30% CAGR growth in Net Sales over the last 5 years

The company has been able to generate a Return on Equity (avg) of 4.14% signifying low profitability per unit of shareholders funds

Poor long term growth as Net Sales has grown by an annual rate of 5.30% over the last 5 years

Flat results in Mar 26

INTEREST(HY) At JPY 27 MM has Grown at 17.39%
NET SALES(Q) Fallen at -12.19%

With ROE of 2.78%, it has a expensive valuation with a 0.96 Price to Book Value

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 33.57%, its profits have risen by 604.1% ; the PEG ratio of the company is 0.1
At the current price, the company has a high dividend yield of 0

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

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

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Howa Machinery, Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Howa Machinery, Ltd.

33.57%

1.18

69.80%

Japan Nikkei 225

59.79%

2.03

29.50%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

5.30%

EBIT Growth (5y)

9.42%

EBIT to Interest (avg)

36.75

Debt to EBITDA (avg)

1.08

Net Debt to Equity (avg)

0.26

Sales to Capital Employed (avg)

0.89

Tax Ratio

44.62%

Dividend Payout Ratio

32.57%

Pledged Shares

Institutional Holding

ROCE (avg)

4.35%

ROE (avg)

4.14%

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

0.96

EV to EBIT

21.03

EV to EBITDA

13.44

EV to Capital Employed

0.96

EV to Sales

0.87

PEG Ratio

0.06

Dividend Yield

ROCE (Latest)

4.58%

ROE (Latest)

2.78%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

Mildly Bearish

No Trend

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

15What is working for the Company

NET PROFIT(Q)

At JPY 251.48 MM has Grown at 268.3%

PRE-TAX PROFIT(Q)

At JPY 518 MM has Grown at 122.32%

RAW MATERIAL COST(Y)

Fallen by -30.93% (YoY

CASH AND EQV(HY)

Highest at JPY 10,074 MM

DEBT-EQUITY RATIO (HY)

Lowest at 2.73 %

INVENTORY TURNOVER RATIO(HY)

Highest at 3.69 times

-13What is not working for the Company

INTEREST(HY)

At JPY 27 MM has Grown at 17.39%

NET SALES(Q)

Fallen at -12.19%

Here's what is working for Howa Machinery, Ltd.

Net Profit

At JPY 251.48 MM has Grown at 268.3%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (JPY MM)

Pre-Tax Profit

At JPY 518 MM has Grown at 122.32%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Cash and Eqv

Highest at JPY 10,074 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at 2.73 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Inventory Turnover Ratio

Highest at 3.69 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -30.93% (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

Depreciation

Highest at JPY 152 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (JPY MM)

Here's what is not working for Howa Machinery, Ltd.

Interest

At JPY 27 MM has Grown at 17.39%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Net Sales

Fallen at -12.19%

Year on Year (YoY)

MOJO Watch

Near term sales trend is negative

Net Sales (JPY MM)

Non Operating Income

Highest at JPY 0.4 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income