Fact based stock research
Hikari Tsushin (TSE:9435)

JP3783420007

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Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

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Hikari Tsushin stock research in summary

hikari.co.jp

ANALYSIS: With an Obermatt Combined Rank of 53 (better than 53% compared with investment alternatives), Hikari Tsushin (Electronics Retail, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Hikari Tsushin are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 54) and are safely financed (Safety Rank of 53, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 53, is a buy recommendation based on Hikari Tsushin's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Hikari Tsushin exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 54). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 53) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	Japan
Industry	Electronics Retail
Index
Size class	X-Large

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Research History: Hikari Tsushin

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	66	59	51	n/a
GROWTH
GROWTH	1	39	35	n/a
SAFETY
SAFETY	33	48	51	n/a
SENTIMENT
SENTIMENT	n/a	68	75	^new
360° VIEW
360° VIEW	n/a	67	57	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better Hikari Tsushin is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	66	59	51	n/a
GROWTH
GROWTH	1	39	35	n/a
SAFETY
SAFETY	33	48	51	n/a
COMBINED
COMBINED	26	46	41	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of Hikari Tsushin the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Hikari Tsushin shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hikari Tsushin. Price-to-Profit (also referred to as price-earnings, P/E) is 70 which means that the stock price compared with what market professionals expect for future profits is lower than for 70% of comparable companies, indicating a good value concerning Hikari Tsushin's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 60, which means that the stock price is lower as regards to invested capital than for 60% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 65% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Hikari Tsushin's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	31	44	25	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	70	82	75	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	58	62	61	n/a
DIVIDEND YIELD
DIVIDEND YIELD	66	58	48	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	66	59	51	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hikari Tsushin; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 54 (better than 54% compared with alternatives), Hikari Tsushin shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Hikari Tsushin. Sales Growth has a below market rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors. The same is valid for Capital Growth, with a rank of 34, and Profit Growth, with a rank of 37. Currently, professionals expect the company to grow its profits less than 63% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 89, which means that the stock returns have recently been above 89% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 54, is a buy recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Hikari Tsushin, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	17	33	4	n/a
PROFIT GROWTH
PROFIT GROWTH	90	59	34	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	50	41	n/a
STOCK RETURNS
STOCK RETURNS	20	27	87	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	1	39	35	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hikari Tsushin.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Hikari Tsushin has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hikari Tsushin is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Hikari Tsushin and the other two below average. Refinancing is at 86, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. But Leverage is high with a rank of 26, meaning the company has an above-average debt-to-equity ratio. It has more debt than 74% of its competitors. Liquidity is also on the riskier side with a rank of 40, meaning the company generates less profit to service its debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Hikari Tsushin has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Hikari Tsushin are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Hikari Tsushin and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	39	28	27	n/a
REFINANCING
REFINANCING	47	80	86	n/a
LIQUIDITY
LIQUIDITY	53	37	39	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	33	48	51	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hikari Tsushin and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	54	60	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	83	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	32	91	^new
MARKET PULSE
MARKET PULSE	n/a	49	45	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	68	75	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hikari Tsushin.
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