Watts Co., Ltd. (2735) 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

Seria Co. Ltd.

Autowave Co., Ltd.

Watts Co., Ltd.

Can Do Co., Ltd.

Jason Co., Ltd.

Kanseki Co., Ltd.

Why is Watts Co., Ltd. ?

Company has very low debt and has enough cash to service the debt requirements

Poor long term growth as Operating profit has grown by an annual rate 3.09% of over the last 5 years

Negative results in Nov 25

INTEREST(HY) At JPY 10.37 MM has Grown at 37.2%
INVENTORY TURNOVER RATIO(HY) Lowest at 3.22 times
DEBTORS TURNOVER RATIO(HY) Lowest at 18.22 times

With ROE of 7.69%, it has a very attractive valuation with a 0.75 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 -10.56%, its profits have risen by 60.3% ; the PEG ratio of the company is 0.2

Below par performance in long term as well as near term

Along with generating -10.56% 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 Watts Co., Ltd. should be less than 10%
Overall Portfolio exposure to Retailing should be less than 30%

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

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

Is Watts Co., Ltd. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

Watts Co., Ltd.

-100.0%

-0.39

26.24%

Japan Nikkei 225

38.94%

1.30

28.24%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

3.51%

EBIT Growth (5y)

3.09%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.24

Sales to Capital Employed (avg)

3.89

Tax Ratio

33.26%

Dividend Payout Ratio

34.85%

Pledged Shares

Institutional Holding

ROCE (avg)

16.21%

ROE (avg)

7.30%

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

0.75

EV to EBIT

4.91

EV to EBITDA

3.03

EV to Capital Employed

0.67

EV to Sales

0.11

PEG Ratio

0.16

Dividend Yield

ROCE (Latest)

13.58%

ROE (Latest)

7.69%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bullish

Bearish

Dow Theory

Mildly Bearish

OBV

No Trend

Bearish

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

1What is working for the Company

RAW MATERIAL COST(Y)

Fallen by -0.03% (YoY

-14What is not working for the Company

INTEREST(HY)

At JPY 10.37 MM has Grown at 37.2%

INVENTORY TURNOVER RATIO(HY)

Lowest at 3.22 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 18.22 times

CASH AND EQV(HY)

Lowest at JPY 11,188.36 MM

DEBT-EQUITY RATIO (HY)

Highest at -19.45 %

Here's what is working for Watts Co., Ltd.

Raw Material Cost

Fallen by -0.03% (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 Watts Co., Ltd.

Interest

At JPY 10.37 MM has Grown at 37.2%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Inventory Turnover Ratio

Lowest at 3.22 times and Fallen

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

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Debtors Turnover Ratio

Lowest at 18.22 times and Fallen

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

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Cash and Eqv

Lowest at JPY 11,188.36 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at -19.45 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio