KATO WORKS CO., LTD. (6390) 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

Nippon Sharyo, Ltd.

Ahresty Corp.

KATO WORKS CO., LTD.

KONDOTEC INC.

Iseki & Co., Ltd.

Alinco, Inc.

Nikko Co., Ltd. (6306)

Terasaki Electric Co., Ltd.

The Kinki Sharyo Co., Ltd.

Daihatsu Diesel Mfg. Co., Ltd.

Sakai Heavy Industries, Ltd.

Why is KATO WORKS CO., LTD. ?

Poor Management Efficiency with a low ROCE of 1.27%

The company has been able to generate a Return on Capital Employed (avg) of 1.27% signifying low profitability per unit of total capital (equity and debt)

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

Poor long term growth as Net Sales has grown by an annual rate of -7.44% and Operating profit at 42.25% over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times
The company has been able to generate a Return on Equity (avg) of 3.14% signifying low profitability per unit of shareholders funds

With a growth in Net Profit of 4517.95%, the company declared Very Positive results in Dec 25

The company has declared positive results in Jan 70 after 4 consecutive negative quarters
ROCE(HY) Highest at 9.91%
DEBTORS TURNOVER RATIO(HY) Highest at 3.66 times
PRE-TAX PROFIT(Q) Highest at JPY 7,216 MM

With ROCE of 1.40%, it has a risky valuation with a 0.60 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 10.54%, its profits have fallen by -222.3%
At the current price, the company has a high dividend yield of 0

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to KATO WORKS CO., LTD. should be less than 10%
Overall Portfolio exposure to Automobiles should be less than 30%

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

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

Is KATO WORKS CO., LTD. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

KATO WORKS CO., LTD.

-100.0%

0.35

38.16%

Japan Nikkei 225

41.2%

1.45

28.34%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-7.44%

EBIT Growth (5y)

42.25%

EBIT to Interest (avg)

-4.17

Debt to EBITDA (avg)

77.18

Net Debt to Equity (avg)

0.65

Sales to Capital Employed (avg)

0.69

Tax Ratio

9.02%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

ROCE (avg)

1.27%

ROE (avg)

3.14%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

NA (Loss Making)

Industry P/E

Price to Book Value

0.35

EV to EBIT

43.25

EV to EBITDA

18.70

EV to Capital Employed

0.60

EV to Sales

0.84

PEG Ratio

Dividend Yield

0.04%

ROCE (Latest)

1.40%

ROE (Latest)

-13.67%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

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

23What is working for the Company

ROCE(HY)

Highest at 9.91%

DEBTORS TURNOVER RATIO(HY)

Highest at 3.66 times

PRE-TAX PROFIT(Q)

Highest at JPY 7,216 MM

NET PROFIT(Q)

Highest at JPY 7,204 MM

EPS(Q)

Highest at JPY 644.56

-10What is not working for the Company

INTEREST(HY)

At JPY 322 MM has Grown at 34.17%

RAW MATERIAL COST(Y)

Grown by 17.71% (YoY

INVENTORY TURNOVER RATIO(HY)

Lowest at 1.02 times

Here's what is working for KATO WORKS CO., LTD.

Pre-Tax Profit

At JPY 7,216 MM has Grown at 7,829.67%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 7,204 MM has Grown at 4,517.95%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (JPY MM)

Pre-Tax Profit

Highest at JPY 7,216 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (JPY MM)

Net Profit

Highest at JPY 7,204 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

EPS

Highest at JPY 644.56

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (JPY)

Debtors Turnover Ratio

Highest at 3.66 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Here's what is not working for KATO WORKS CO., LTD.

Interest

At JPY 322 MM has Grown at 34.17%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Inventory Turnover Ratio

Lowest at 1.02 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Raw Material Cost

Grown by 17.71% (YoY)

MOJO Watch

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

Raw Material Cost as a percentage of Sales