LEC, Inc. (Japan) (7874) 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

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TAKUMA CO., LTD.

FP Corp.

Chiyoda Integre Co., Ltd.

LEC, Inc. (Japan)

Kurita Water Industries Ltd.

Teikoku Sen-I Co., Ltd.

Why is LEC, Inc. (Japan) ?

Poor long term growth as Operating profit has grown by an annual rate -8.07% of over the last 5 years

Positive results in Jun 25

NET PROFIT(9M) At JPY 1,762 MM has Grown at 53.48%
ROCE(HY) Highest at 4.46%
INVENTORY TURNOVER RATIO(HY) Highest at 4.1%

With ROCE of 5.49%, it has a attractive valuation with a 1.25 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 -17.88%, its profits have risen by 101.9% ; the PEG ratio of the company is 0.2

Below par performance in long term as well as near term

Along with generating -17.88% returns in the last 1 year, the stock has also underperformed Japan Nikkei 225 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to LEC, Inc. (Japan) should be less than 10%
Overall Portfolio exposure to Miscellaneous should be less than 30%

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

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

Is LEC, Inc. (Japan) for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

LEC, Inc. (Japan)

-17.88%

-0.56

35.08%

Japan Nikkei 225

28.54%

1.11

25.75%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.58%

EBIT Growth (5y)

-8.07%

EBIT to Interest (avg)

23.72

Debt to EBITDA (avg)

1.57

Net Debt to Equity (avg)

0.43

Sales to Capital Employed (avg)

0.79

Tax Ratio

22.29%

Dividend Payout Ratio

37.88%

Pledged Shares

Institutional Holding

ROCE (avg)

6.57%

ROE (avg)

6.02%

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

1.36

EV to EBIT

22.74

EV to EBITDA

9.82

EV to Capital Employed

1.25

EV to Sales

0.93

PEG Ratio

0.23

Dividend Yield

ROCE (Latest)

5.49%

ROE (Latest)

5.82%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Mildly Bearish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bullish

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

12What is working for the Company

NET PROFIT(9M)

At JPY 1,762 MM has Grown at 53.48%

ROCE(HY)

Highest at 4.46%

INVENTORY TURNOVER RATIO(HY)

Highest at 4.1%

RAW MATERIAL COST(Y)

Fallen by -15.11% (YoY

PRE-TAX PROFIT(Q)

Highest at JPY 1,171 MM

-8What is not working for the Company

INTEREST(HY)

At JPY 150 MM has Grown at 32.74%

Here's what is working for LEC, Inc. (Japan)

Net Profit

At JPY 1,226 MM has Grown at 105.36%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

Inventory Turnover Ratio

Highest at 4.1% 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

Pre-Tax Profit

Highest at JPY 1,171 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (JPY MM)

Pre-Tax Profit

At JPY 1,171 MM has Grown at 71.58%

over average net sales of the previous four periods of JPY 682.5 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (JPY MM)

Raw Material Cost

Fallen by -15.11% (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 LEC, Inc. (Japan)

Interest

At JPY 150 MM has Grown at 32.74%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)