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Japan’s stock markets have shown modest gains recently, with the Nikkei 225 Index rising 0.8% and the broader TOPIX Index up 0.2%. Amid this backdrop, small-cap stocks in Japan are attracting attention as potential investment opportunities due to their strong fundamentals and resilience in a fluctuating market. In identifying good stocks, especially within the small-cap segment, key factors include robust financial health, growth potential, and adaptability to changing economic conditions. This article will explore three such Japanese small-cap companies that stand out for their solid fundamentals and promising outlooks.
Top 10 Undiscovered Gems With Strong Fundamentals In Japan
| Name | Debt To Equity | Revenue Growth | Earnings Growth | Health Rating |
|---|---|---|---|---|
| QuickLtd | 0.73% | 9.61% | 14.56% | ★★★★★★ |
| Nitto Fuji Flour MillingLtd | 0.80% | 6.26% | 4.41% | ★★★★★★ |
| Central Forest Group | NA | 7.05% | 14.29% | ★★★★★★ |
| Kanda HoldingsLtd | 30.47% | 4.35% | 18.02% | ★★★★★★ |
| Ad-Sol Nissin | NA | 4.02% | 7.90% | ★★★★★★ |
| Techno Smart | NA | 6.07% | -0.57% | ★★★★★★ |
| Maezawa Kasei Industries | 0.81% | 2.01% | 18.42% | ★★★★★★ |
| Nikko | 31.99% | 4.24% | -8.75% | ★★★★★☆ |
| AJIS | 0.69% | 0.07% | -12.44% | ★★★★★☆ |
| Nippon Sharyo | 61.34% | -1.68% | -17.07% | ★★★★☆☆ |
Below we spotlight a couple of our favorites from our exclusive screener.
Token
Simply Wall St Value Rating: ★★★★★★
Overview: Token Corporation operates as a construction company in Japan with a market cap of ¥155.95 billion.
Operations: Token Corporation generates revenue primarily from its Real Estate Rental Business (¥207.90 billion) and Construction Business (¥131.49 billion).
Earnings for Token grew by 70.7% over the past year, outpacing the Consumer Durables industry at -2.8%. With no debt for the last five years and high-quality earnings, Token is in a strong financial position. The company repurchased shares this year, indicating confidence in its future prospects. Earnings are forecast to grow at 9.78% annually, showcasing potential for sustained growth.
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Get an in-depth perspective on Token's performance by reading our health report here.
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Assess Token's past performance with our detailed historical performance reports.
Torii Pharmaceutical
Simply Wall St Value Rating: ★★★★★★
Overview: Torii Pharmaceutical Co., Ltd. manufactures and markets pharmaceutical products in Japan with a market cap of ¥101.48 billion.
Operations: Torii Pharmaceutical generates revenue primarily from the sale of pharmaceutical products in Japan. The company has a market cap of ¥101.48 billion.
Torii Pharmaceutical, a small but promising player in Japan's pharmaceutical sector, has seen its earnings grow by 65% over the past year, significantly outpacing the industry's 8.6%. The company is debt-free and has maintained this status for five years. Additionally, it boasts high-quality earnings and positive free cash flow. Despite these strengths, future projections indicate a potential average annual decline of 1% in earnings over the next three years.