Big Japanese Stocks Showing Signs of Undervaluation

Following is a list of Japanese companies, whose stocks trade on American exchanges, which are trading at less than book value.  Book value is the value of assets carried on the balance sheet, less the value of liabilities.  This implies is that you can acquire an interest in a company (via its stock) that the market is valuing at less than residual value of the company’s assets.  In theory, if the company were to go out of business, and all creditors’ claims (the company’s liabilities) were settled, the assets could be liquidated, and cash in excess of the current market price per share be returned to shareholders.  Of course, if the book value of assets are overstated on the balance sheet, shareholders may not be able to recoup the amount of cash implied by balance sheet valuations.  Note that this screen originally appeared hereMust Read: Jump Ahead in June with Top Insights and Winning Trade Ideas>>

  • Mizuho Financial Group, Inc. (NYSE:MFG): The shares have traded in a 52-week range of the $2.67 to $4.27 and have most recently traded at $3.10.  Its market capitalization is $33.75 billion.  The price to book value ratio is 0.67 for the most recent quarter.  The company has $450.01 billion in cash on its balance sheet and $631.12 billion in debt.  Book value per share is $4.49. About the company:  Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.
  • Mitsubishi UFJ Financial Group, Inc. (NYSE:MTU): The shares have traded in a 52-week range of $4.36 to $5.68 and most recently traded at $4.60 per share.  Its market capitalization is $65.05 billion.  The price to book value ratio is 0.57 for the most recent quarter.  The company has $355.85 billion in cash on its balance sheet against $426.41 billion in debt.  Book value per share is $7.91.  About the company:  Mitsubishi UFJ Financial Group, Inc. (MUFG) is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. As a financial group, the Company provides a variety of financial and investment services including commercial banking, trust banking, international finance, and assets management services.
  • Nomura Holdings, Inc. (NYSE:NMR): The shares have traded in a 52-week range of $4.61 to $6.75 and most recently traded at $4.75 per share.  Its market capitalization is $17.1 billion.  Its price to book value ratio is 0.64.  The company has $398 billion in cash on its balance sheet against $290.5 billion in debt.  Its book value per share is $7.23.  About the company:  Nomura Holdings, Inc. is a holding company which manages financial operations for its subsidiaries. As a group, the Company provides a variety of financial services such as dealing, brokerage, underwriting, and asset management. Nomura Securities Co., a registered member of the New York and London Stock Exchanges, has branches around the world.
  • Nippon Telegraph & Telephone Corp. (NYSE:NTT):  The shares have traded in a 52-week range of $20.12 to $25.18 and most recently traded at $23.75.  Its market capitalization is $62.85 billion.  The shares trade at a price to book value ratio for the most recent quarter of 0.63. The company has $20.02 billion in cash on its balance sheet against $57.08 billion in debt.  Its book value per share is $37.87.    About the company:  NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NYSE:NTT) provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.
  • Panasonic Corporation (NYSE:PC):  The shares have traded in a 52-week range of $10.76 to $15 and most recently traded at $11.68 per share.  Its market capitalization is $24.18 billion. Its price to book value ratio is 0.75.  The company has $13.05 billion in cash on its balance sheet against $19.9 billion in debt, and its book value per share is $15.44. About the company:  Panasonic Corporation manufactures electric and electronic products. The Company produces home appliances, audio & video, computer peripherals, telecommunications, industrial equipment, and electronic parts. Panasonic has associated companies around the world.
  • Sony Corporation (NYSE:SNE): The shares have traded in a 52-week range of $24.21 to $36.97 and most recently traded at $25.18 per share.  Its market capitalization is $25.27 billion.  The shares are trading at a price to book value ratio of 0.77.  The company has $20.75 billion in cash on its balance sheet against total debt of $12.37 billion.  Its book value per share is $31.72.  About the company:  SONY CORPORATION manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets. The Company’s other businesses include music, pictures, computer entertainment, and online businesses.
  • Toyota Motor Corp. (NYSE:TM):  The shares have traded in a 52-week range of $67.56 to $93.90 and most recently traded at $81.28 per share.  Its market capitalization is $127.43 billion.  The shares are trading at a price to book value ratio of 0.98.   The company has $43.85 billion in cash on its balance sheet, against $154.9 billion in debt.  Book value per share is $82.33.  About the company:  TOYOTA MOTOR CORPORATION manufactures, sells, leases, and repairs passenger cars, trucks, buses, and their related parts worldwide. The Company also operates financing services through their subsidiaries. Toyota Motor builds homes, produces pleasure boats, and develops intelligent transportation systems including radar cruise control and electronic toll collection systems. Competitors to Watch: Copart, Inc. (NASDAQ:CPRT), America’s Car-Mart, Inc. (NASDAQ:CRMT), KAR Auction Services Inc (NYSE:KAR), AutoNation, Inc. (NYSE:AN), Penske Automotive Group, Inc. (NYSE:PAG), Group one Automotive, Inc. (NYSE:GPI), Ford Motor Company (NYSE:F), General Motors (NYSE:GM), and Sonic Automotive, Inc. (NYSE:SAH).

(Note: Selected financial data are sourced from Yahoo! Finance.  All data are assumed to be accurate.)

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