| Symbol | Company | Pick history | Pick price | % Return at exit | Action | Sectors | Industries | Incentive | Rationale | hf:tax:sector | hf:tax:industry |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 6737.T | EIZO Corporation | 02/01/2026 | ¥2,237 | -3.4% | Removed | Technology | Computer Hardware | Market weakness amid European slowdown | • Rotated out as regional challenges impact growth metrics relative to peer alternatives. • Recent performance shows concerning trend with negative returns across multiple timeframes (-8.8% 1-week, -3.4% 1-month, -1.3% 3-month), suggesting weakening investor confidence. • Company has significantly lowered guidance, projecting a 1.9% net sales decline and a 62.2% drop in operating profit due to extended economic slowdown in European markets. • Financial metrics reflect challenges with stagnant revenue growth (0.9%) and declining quarterly revenue (-1.8%), while EBITDA has contracted by 7.2%. • Despite trading below book value (P/B: 0.64) and offering an attractive 5.1% dividend yield, the 30.2% dividend reduction signals potential sustainability concerns. • This change reflects portfolio rotation, not a sell signal. | technology | computer-hardware |
| 5208.T | Arisawa Mfg. Co., Ltd. | 02/01/2026 | ¥1,723 | 3.6% | Removed | Technology | Hardware, Equipment & Parts | Valuation concerns amid profit volatility | • Rotated out as other companies show stronger risk-reward profiles in the current environment. • Recent semi-annual results revealed concerning profit declines: operating profit down 10%, ordinary profit down 26%, with significant weakness in the display materials segment (sales down 29%). • Trading at a PEG ratio of 2.7 and above InvestingPro's fair value estimate of ¥1,618, suggesting limited upside potential despite reaching 97% of its 52-week high. • Foreign exchange losses and segment volatility increased the company's risk profile, though 8% annual revenue growth and a robust 4.9% dividend yield remain positive attributes. • This change reflects portfolio rotation toward more attractively valued opportunities, not a sell signal. | technology | hardware-equipment-parts |
| 8035.T | Tokyo Electron Limited | 02/01/2026 | ¥41,310 | Live | Added | Technology | Semiconductors | Soaring Performance in Semiconductor Recovery | • Tokyo Electron's stock was selected by our ML engine due to its exceptional market performance (86% price return over 6 months, 62% over 1 year) combined with impressive growth metrics and reasonable valuation. • The company demonstrates robust revenue growth (17% LTM) with industry-leading 28% operating margins and 21% return on assets, fueling a healthy 4.5% dividend growth. • Multiple analyst firms (Bernstein, Morgan Stanley) highlight Tokyo Electron as a top pick for 2026, with price targets up to ¥44,200, citing its strong positioning in the AI-driven semiconductor equipment recovery. • As the fourth-largest global semiconductor equipment supplier, Tokyo Electron is strategically positioned to benefit from increasing AI chip demand, memory spending recovery, and Japan's ¥10 trillion semiconductor industry support through 2030. | technology | semiconductors |
| 7751.T | Canon Inc. | 02/01/2026 | ¥4,685 | Live | Added | Technology | Computer Hardware | Value-Priced Growth With Strong Momentum | • Canon's stock has been identified as a strong buy opportunity based on our ML engine's analysis of its compelling market performance, attractive valuation, and solid growth prospects. • The stock shows strong price momentum with 6-month returns of 9.1% and is currently trading at ~90% of its 52-week high, suggesting continued upward potential. • From a valuation perspective, Canon offers exceptional value with a P/E ratio of 12.8 and an impressively low PEG ratio of 0.1, combined with a generous 3.4% dividend yield. • The company's fundamentals support this bullish outlook with revenue growth accelerating to 3.8% quarterly, healthy profit margins (46.8% gross margin), and new product innovations like the LG-P800 printer. • Morgan Stanley's "overweight" rating with a ¥5,800 price target confirms significant upside potential (~27%), with the current price well below both analyst fair value (¥5,082) and InvestingPro fair value (¥5,428). | technology | computer-hardware |
| 6436.T | Amano Corporation | 02/01/2026 | ¥4,094 | -4.4% | Removed | Technology | Hardware, Equipment & Parts | Modest growth amid price weakness | • Rotated out due to softer market performance and growth-to-value metrics • Recent price action shows consistent weakness across timeframes (-7.08% 1-month, -7% 6-month), with the stock currently sitting ~15% below its 52-week high • PEG ratio of 5.9 suggests limited value relative to the company's modest growth trajectory (revenue growing at just 3.3%) • Facing strategic challenges including declining North American sales and difficulties recruiting engineering talent amid Japan's demographic shifts • Still maintains solid fundamentals with healthy 13% operating margins and attractive 4.6% dividend yield • This change reflects portfolio rotation toward higher growth opportunities, not a sell signal | technology | hardware-equipment-parts |
| 8060.T | Canon Marketing Japan Inc. | 02/01/2026 | ¥6,740 | Live | Added | Industrials | Business Equipment & Supplies | Strong Growth with Increasing Profitability | • Canon Marketing Japan shows exceptional performance across our model's key selection criteria: market performance, profitability, and growth. • Impressive market performance with 35.8% 1-year return and 23.6% 6-month return, demonstrating strong momentum while still trading below analyst fair value estimates of 7,800 JPY. • Solid profitability metrics with operating margin of 8.2% and return on assets of 7.6%, supported by five consecutive years of both revenue and profit increases. • Compelling growth story with EBITDA increasing 11.2% and revenues up 4%, while strategic shift toward higher-margin IT solutions is bearing fruit earlier than expected. • Shareholder-friendly policies evidenced by 21.4% dividend growth, with additional value creation through recent stock split and share buyback program. | industrials | business-equipment-supplies |
| 6146.T | Disco Corporation | 02/01/2026 | ¥66,190 | Live | Added | Technology | Semiconductors | AI-Driven Semiconductor Equipment Leader | • DISCO Corp's stellar market performance is evidenced by impressive returns: 51% over 6 months and 50% over the past year, with the stock trading near its 52-week high (92%). • Exceptional profitability metrics demonstrate operational excellence: 42% operating margin and 20% return on assets, supported by management confirmation that facilities are running at full capacity to meet demand. • Strong growth trajectory continues with 13% revenue growth (LTM), 17% quarterly revenue growth, and 23% dividend growth, while Q3 orders exceeded expectations by ¥10 billion. • Multiple analyst firms (Bernstein, Morgan Stanley) have identified DISCO as a prime beneficiary of AI semiconductor expansion, with Bernstein raising its FY27 EPS growth forecast to 30%. • The company's specialized precision equipment for advanced packaging and HBM memory positions it perfectly within the AI chip manufacturing ecosystem, with continued capacity expansion to meet surging demand. | technology | semiconductors |
| 9274.T | Kpp Group Holdings Co., Ltd. | 01/01/2026 | ¥824 | Live | Added | Industrials | Industrial - Distribution | Undervalued Gem With Strong Returns | • KPP Group Holdings presents a compelling value opportunity with a P/E ratio of just 7.9 and trading at only 0.6x book value, while offering ~13% upside to fair value of ¥942. • The stock has demonstrated exceptional market performance with returns of 13% over the past month, 14% over six months, and an impressive 34% over the past year. • Despite recent revenue challenges, the company's strategic transformation toward packaging and visual communication is showing promise, with the Real Estate Leasing segment growing sales by 25%. • Income-focused investors benefit from a generous 4.4% dividend yield with remarkable dividend growth of 64% over the last twelve months. • The company's strong financial position and clear long-term vision "GIFT 2030" provide a solid foundation for continued growth and shareholder returns. | industrials | industrial-distribution |
| 8219.T | Aoyama Trading Co., Ltd. | 01/01/2026 | ¥2,536 | Live | Added | Consumer Cyclical | Apparel - Retail | Value Play with Strong Momentum | • Aoyama Trading stands out for its compelling combination of market outperformance and attractive valuation, with shares gaining 20.7% over the past year while trading at just 0.7x book value. • The stock offers an impressive 5.4% dividend yield with remarkable 51% dividend growth, demonstrating management's commitment to shareholder returns, recently reinforced by the announced share buyback program and 3-for-1 stock split. • Despite slight revenue contraction (-1%), the company maintains healthy profitability with 51.8% gross margins and 6.2% operating margins, while individual segments show strong performance (Franchisee Business at record highs, Business Wear profits up 14.3%). • Trading below the InvestingPro fair value of 2,812 JPY, the stock presents significant upside potential with fundamental strength to support continued price appreciation. | consumer-cyclical | apparel-retail |
| 5970.T | G-Tekt Corporation | 01/01/2026 | ¥1,964 | Live | Added | Consumer Cyclical | Auto - Parts | Undervalued Auto Supplier With EV Potential | • G-Tekt Corp stands out as a compelling value opportunity with a remarkably low P/E ratio of 6.9 and Price/Book of just 0.41, suggesting significant undervaluation. • The company delivers strong market performance with impressive 1-year returns of 17.6% while maintaining an attractive 4.6% dividend yield with exceptional 25% dividend growth. • Despite short-term revenue challenges (-5.9%), G-Tekt is strategically positioning for future growth through EV component specialization, including battery housings and motor cores. • Global expansion continues with new plants in China and Japan, while the company's sustainability initiatives and lightweight material technologies align perfectly with automotive industry trends. • Trading at just 75% of InvestingPro's fair value estimate, G-Tekt offers substantial upside potential while rewarding investors with growing shareholder returns. | consumer-cyclical | auto-parts |
| 8897.T | Mirarth Holdings, Inc. | 01/01/2026 | ¥387 | Live | Added | Real Estate | Real Estate - Development | Value Play with Strong Dividend Yield | • Mirarth Holdings presents a compelling value opportunity, trading at just 0.66x book value with a P/E ratio of 10.1, significantly below market average. • The current 5.4% dividend yield offers substantial income potential while investors wait for share price appreciation, with the stock currently trading at only 73% of its 52-week high. • Recent positive price momentum (5.6% over six months) suggests market recognition of the company's improving fundamentals. • The successful 11 billion yen capital raise demonstrates market confidence and provides funding for strategic growth initiatives in hotel assets and renewable energy. • ESG focus through sustainability-linked loans and renewable energy investments positions the company well for long-term growth despite recent revenue challenges. | real-estate | real-estate-development |
| 8032.T | Japan Pulp and Paper Company Limited | 01/01/2026 | ¥724 | 21.7% | Removed | Basic Materials | Paper, Lumber & Forest Products | Profitability decline amid high valuation | • Japan Pulp and Paper rotated out due to relative weaknesses in market metrics versus alternatives. • Despite strong 6-month returns (+46.5%), fundamental performance has deteriorated with operating profit declining 47.1% and profit to owners plummeting 83.9% in recent results. • Valuation appears stretched with a P/E ratio of 39.4, particularly concerning given the negative earnings growth outlook. • Significant dividend cut (-74%) signals management's cautious financial outlook, though the current yield remains attractive at 3.9%. • The company faces ongoing challenges from a 2023 bid-rigging investigation, potentially affecting business relationships and reputation. • Some positive factors remain: trading below book value (P/B: 0.76) and modest revenue growth (+4%). This change reflects portfolio rotation, not a sell signal. | basic-materials | paper-lumber-forest-products |
| 6250.T | Yamabiko Corporation | 01/01/2026 | ¥2,691 | 12.1% | Removed | Industrials | Industrial - Machinery | Performance concerns amid quality issues | • Rotated out as other stocks showed stronger relative performance-risk profiles. • Despite positive revenue growth of ~8%, Yamabiko's profitability metrics have weakened with operating profit declining 2.5% in recent quarters while facing foreign exchange headwinds. • Multiple product recalls (chainsaws, generators, cultivators) signal potential quality control challenges that could impact future earnings stability. • Stock price volatility has been notable with significant swings – 40% gain over six months followed by recent fluctuations – creating a less predictable return profile. • Company maintains some positive attributes including a 3% dividend yield and trading at a reasonable P/E ratio of 8.7, suggesting fundamental value remains despite current challenges. • This change reflects portfolio rotation, not a sell signal. | industrials | industrial-machinery |
| 4996.T | Kumiai Chemical Industry Co., Ltd. | 01/01/2026 | ¥691 | 1.9% | Removed | Basic Materials | Agricultural Inputs | Market underperformance amid profit concerns | • Rotated out as market metrics lagged peers despite attractive valuation metrics. • Stock has declined across multiple timeframes (-11.4% over 3 months, ~10% over 6 months), underperforming relative to other opportunities in our universe. • Profitability challenges evident with EBITDA declining ~2% despite revenue growth, and concerning forward guidance projecting a 32% operating profit decrease for fiscal 2026. • Significant extraordinary losses (¥3.8 billion) from asset impairment in Thailand operations have pressured financial performance. • Positive revenue growth (+5.8% LTM, +13% quarterly) and trading below book value (P/B: 0.59) suggest underlying business stability despite current challenges. • This change reflects portfolio rotation, not a sell signal. | basic-materials | agricultural-inputs |
| 7762.T | Citizen Watch Co., Ltd. | 01/01/2026 | ¥1,276 | Live | Added | Industrials | Conglomerates | Value Play with Strong Momentum | • Our ML engine selected Citizen Watch based on exceptional market performance, attractive valuation, and solid growth prospects. • The stock shows remarkable momentum with 55% price return over 6 months and 43% over the past year, currently trading near its 52-week high (94%). • Valuation remains compelling with a P/E of 13.3 and Price-to-Book of just 1.2, while offering a generous 3.7% dividend yield that's growing at 10.6%. • Recent quarterly revenue growth of 4.1% shows accelerating business momentum, supported by strong global watch sales expansion. • Multiple analysts have raised their price targets recently, with InvestingPro suggesting a fair value of ¥1,371, indicating additional upside potential despite the recent rally. | industrials | conglomerates |
| 9449.T | GMO Internet, Inc. | 01/01/2026 | ¥3,918 | Live | Added | Communication Services | Telecommunications Services | Strong Growth in AI Cloud Infrastructure | • GMO Internet stands out with remarkable 48.6% one-year price return, trading near its 52-week high (95.3%) while still offering upside potential. • Impressive profitability metrics demonstrate operational excellence: 59.9% gross margin and 19.2% operating margin, with EBITDA growing at 15.3%. • Strategic expansion in high-growth AI infrastructure through "GMO GPU Cloud" positions the company at the forefront of Japan's AI revolution, ranking 1st nationally for power efficiency in the Green500 evaluation. • Key partnerships with ITOCHU Techno-Solutions and adoption by unicorn Sakana AI validate the company's technology leadership. • Strong shareholder returns policy with 100% dividend payout ratio and authorized share buyback program enhances total return potential. | communication-services | telecommunications-services |
| 6448.T | Brother Industries, Ltd. | 01/01/2026 | ¥3,122 | Live | Added | Industrials | Business Equipment & Supplies | Value, Growth, and Momentum Trifecta | • Brother Industries stands out as a compelling opportunity based on its impressive market performance (28% 3-month return), attractive valuation (P/E: 14.6, P/B: 1.1), and solid growth trajectory. • The company recently reported record Q2 sales of ¥224.7 billion (+5.7% YoY) and raised its full-year guidance, now expecting sales of ¥900 billion (+2.9%), business profit of ¥80 billion (+6.7%), and net profit of ¥63 billion (+14.5%). • The machinery segment is booming with 26.9% YoY sales growth, while the printing segment maintains steady performance despite tariff headwinds. • Analysts are increasingly bullish, with Nomura raising its target to ¥3,800 and Jefferies upgrading to Buy with a ¥3,500 target – both significantly above the current price of ¥3,127. • A 3.2% dividend yield provides additional income while investors wait for the stock to reach fair value. | industrials | business-equipment-supplies |
| 6724.T | Seiko Epson Corporation | 01/01/2026 | ¥1,983 | Live | Added | Technology | Computer Hardware | Undervalued with Improving Growth Trajectory | • Our ML engine highlights Seiko Epson as a compelling buy opportunity based on attractive valuation, improving market performance, and solid growth metrics. • Trading at a P/E of just 12.7 and price-to-book of 0.8, the stock appears significantly undervalued compared to its fair value estimates (InvestingPro: ¥2,805, ~40% upside). • Recent momentum shows clear recovery with positive returns over 1-month (4.6%), 3-month (5.4%), and 6-month (7.2%) periods, despite being only 68% of its 52-week high. • Strong EBITDA growth of 17% and quarterly revenue growth of 2.6% demonstrate improving business fundamentals, supported by strong performance in the printing solutions segment. • A healthy 3.7% dividend yield offers attractive income while investors wait for price appreciation, with Nomura/Instinet recently reaffirming their buy rating. | technology | computer-hardware |
| 4704.T | Trend Micro Incorporated | 01/01/2026 | ¥6,502 | Live | Added | Technology | Software - Infrastructure | Strong Profitability with Attractive Valuation | • Our ML engine identified Trend Micro as a compelling opportunity based on exceptional profitability metrics (76.6% gross margin, 19.6% operating margin) combined with an attractive valuation (PEG ratio: 0.53). • The company significantly outperformed Q3 earnings expectations with EPS of 95.72 yen (28% above forecasts) while achieving record quarterly operating income (+8% YoY) and net income (+48% YoY). • Vision One platform demonstrates strong market traction with 74% year-over-year growth and impressive 136% net revenue retention, signaling successful strategic positioning in the cybersecurity market. • Currently trading at just 53% of its 52-week high despite operational improvements, the stock price (6525 JPY) remains well below analyst fair value targets (7950 JPY), suggesting meaningful upside potential. • Strong cash flow generation (+150% YoY) provides financial flexibility for continued innovation and shareholder returns (dividend growth: 185.7%). | technology | software-infrastructure |
| 7595.T | ARGO GRAPHICS Inc. | 01/01/2026 | ¥1,621 | Live | Added | Technology | Information Technology Services | Strong Growth, Value, and Dividends | • Our ML engine identified Argo Graphics as a compelling buy opportunity based on exceptional market performance (32% 1-year return), strong profitability metrics, and attractive valuation. • The company demonstrates robust financial health with 14.8% operating margin and impressive 9.9% return on assets, while maintaining steady revenue growth (9.1% quarterly). • Valuation metrics are highly favorable with a PEG ratio of just 1.07 and adjusted P/E of 15, suggesting the stock remains undervalued despite recent gains. • Shareholder returns are exceptional, featuring a 6.2% dividend yield with remarkable 300% dividend growth, complemented by a significant share buyback program (21.5% of outstanding shares). • Recent analyst upgrades, boosted profit forecasts, and the new Medium-Term Management Plan provide additional catalysts for continued share price appreciation. | technology | information-technology-services |
| 6723.T | Renesas Electronics Corporation | 01/01/2026 | ¥1,810 | 19.8% | Removed | Technology | Semiconductors | Performance concerns amid semiconductor headwinds | • Rotated out due to relative positioning in our model's ongoing portfolio optimization. • Revenue decline of ~11% year-over-year with quarterly decline continuing (-2.9%), suggesting persistent headwinds in key markets. • Significant EBITDA deterioration (-43.5%) indicates profitability challenges, reflected in negative earnings metrics and ROA (-1.15%). • Recent strategic setbacks include scaling back power semiconductor business and delaying revenue goals from 2030 to 2035. • Expected substantial losses (~250B yen) from key supplier Wolfspeed's bankruptcy add financial uncertainty. • Despite challenges, the company maintains solid gross margins (56%) and shows promising momentum in AI infrastructure demand, with recent price recovery (+28.4% over 3 months). • This change reflects portfolio rotation, not a sell signal. | technology | semiconductors |
| 285A.T | Kioxia Holdings Corp. | 01/01/2026 | ¥8,882 | 17.5% | Removed | Technology | Hardware, Equipment & Parts | Extreme volatility amid valuation concerns | • Rotated out as extreme price movements and valuation metrics suggest better opportunities elsewhere • Recent price action shows concerning volatility with a 23% drop following Q3 results and another 8.8% decline on Bain Capital's ¥355 billion ($2.3B) share sale announcement • Despite 536% 12-month return, the stock has pulled back to 72% of its 52-week high, with negative 1-week performance (-3.33%) • Current valuation appears stretched with P/E ratio of 31.9 and price-to-book of 6.9, while trading ~22% above InvestingPro fair value estimate • Fundamentally supported by growing AI-driven memory demand and planned US-Japan joint manufacturing venture, but Q4 guidance disappointed (¥120B operating profit vs ¥150-180B expected) • This change reflects portfolio rotation, not a sell signal | technology | hardware-equipment-parts |
| 4674.T | Cresco Ltd. | 01/01/2026 | ¥1,539 | 13.5% | Removed | Technology | Information Technology Services | Margin pressure amid mixed momentum | • Rotated out as other holdings offered stronger combinations of growth and profitability metrics. • Recent market performance shows mixed signals — strong 1-year return of 47% but more modest 6-month gain of just 4.4%, suggesting potentially slowing momentum. • Profitability metrics reflect challenges, with operating margin under 10% and EBITDA growth of 6.9% lagging behind revenue growth of 10%. • Company faces headwinds from yen depreciation and rising procurement costs, with recent impairment losses totaling over 340 million yen affecting bottom-line results. • Maintains several positive attributes, including healthy dividend yield (3.3%) with exceptional dividend growth (78%), and steady revenue expansion. This change reflects portfolio rotation, not a sell signal. | technology | information-technology-services |
| 7915.T | Nissha Co., Ltd. | 01/01/2026 | ¥1,196 | 6.6% | Removed | Technology | Hardware, Equipment & Parts | Performance weakness amid valuation concerns | • Rotated out due to lagging market performance and inconsistent valuation metrics relative to peers. • Stock has experienced significant underperformance, with a -20.3% return over the past year and recent quarterly revenue decline of -1.1%. • EBITDA declined by ~10.8% over the last twelve months, indicating operational challenges. • Earnings quality concerns reflected in negative EPS (-1.18 JPY) and unusually high negative P/E ratio. • JPMorgan recently reduced their price target to ¥1,100 from ¥1,500, though maintained a neutral rating. • Some positive factors remain: attractive 4% dividend yield, price-to-book ratio of 0.53, and reasonable gross profit margin of ~22%. • This change reflects portfolio rotation toward stronger alternatives, not a sell signal. | technology | hardware-equipment-parts |
| 6750.T | Elecom Co., Ltd. | 01/01/2026 | ¥1,755 | -1.9% | Removed | Technology | Computer Hardware | Market softness and moderate growth outlook | • Rotated out as recent market performance lagged, with price returns of -5.3% over three months and -4% over six months. • Trading at ~84% of its 52-week high, suggesting momentum has slowed despite the positive 1-year return of 18.8%. • Revenue growth appears modest at 4.5%, potentially falling short against more dynamic competitors in the tech accessories sector. • Company maintains solid fundamentals with an attractive 3% dividend yield, 13% dividend growth, and reasonable P/E ratio of ~13. • Analyst targets suggest ~25% upside potential (fair value 2175-2459 JPY vs current 1730 JPY), indicating continued confidence in the business. • This change reflects portfolio rotation toward more compelling near-term opportunities, not a sell signal. | technology | computer-hardware |
| 8056.T | Biprogy Inc. | 01/01/2026 | ¥6,236 | -13.2% | Removed | Technology | Information Technology Services | Recent underperformance despite solid fundamentals | • Rotated out as our model identified alternatives with stronger near-term momentum profiles. • Declining share price trend (-9.4% over three months) despite 10.4% revenue growth suggests waning market confidence. • Analysts have recently lowered price targets (Nomura to ¥6,000 from ¥6,100; JPMorgan to ¥5,500 from ¥6,200), indicating shifting sentiment. • Profitability metrics (9.8% operating margin, 10% ROA) remain solid but may lag sector leaders in the current competitive landscape. • Company maintains positive attributes including 11.6% EBITDA growth and healthy dividend (2.2% yield with 14.3% growth), suggesting enduring operational strength. • This change reflects portfolio rotation, not a sell signal. | technology | information-technology-services |
| 4820.T | EM Systems Co., Ltd. | 01/01/2026 | ¥794 | Live | Added | Healthcare | Medical - Healthcare Information Services | Value Play with Strong Market Position | • EM Systems stands out with exceptional value metrics, including a remarkably low PEG ratio of 0.28 and significant upside potential (current price: ¥787 vs analyst target: ¥1,300). • The company demonstrates impressive profitability with an 18.4% operating margin and robust ROE of 11.7%, supported by recent quarterly profit growth of 70.4%. • Strong market momentum is evident with 14.3% price appreciation over six months, complemented by an attractive 4.9% dividend yield and 11.4% dividend growth. • As the dominant player (43.7% market share) in pharmacy IT systems in Japan, EM Systems is strategically positioned to benefit from healthcare digital transformation initiatives while expanding into clinics and long-term care segments. • The company's strong financial position, with low debt and consistent execution, provides a solid foundation for continued growth through both organic expansion and strategic acquisitions. | healthcare | medical-healthcare-information-services |
| 8173.T | Joshin Denki Co., Ltd. | 01/01/2026 | ¥2,498 | 8.6% | Removed | Consumer Cyclical | Department Stores | Profitability concerns amid valuation questions | • Rotated out due to relative attractiveness compared to other retail opportunities • Sharp profitability decline with operating income margin narrowing to just 0.95%, while operating profit is projected to decrease dramatically from ¥16.5 billion (FY2021) to ¥3.7 billion (FY2025) • EBITDA contracted by ~14% despite positive revenue growth of 5.9% • Current P/E of 22.6× appears elevated given the profit trajectory, with adjusted forward P/E reaching 32.7× • Several concerning non-financial developments including legal issues may be impacting business stability • Maintains some positive attributes: consistent revenue growth (8.8% quarterly), attractive 3.7% dividend yield, and trading below book value (P/B: 0.67) • This change reflects portfolio rotation, not a sell signal | consumer-cyclical | department-stores |
| 9474.T | Zenrin Co., Ltd. | 01/01/2026 | ¥1,038 | 1.5% | Removed | Communication Services | Internet Content & Information | Valuation concerns amid modest growth | • Zenrin was rotated out of our strategy as other opportunities showed more favorable risk-reward profiles. • Current trading price (¥1057) is almost exactly at analyst fair value targets (¥1050), suggesting limited near-term upside potential. • P/E ratio of 18.9 appears relatively high against modest revenue growth of ~3.6%, resulting in an unfavorable negative PEG ratio (-2.98). • Recent performance has been sluggish with minimal gains over shorter timeframes (1-month: 1.5%, 3-month: 0.7%), despite stronger 1-year returns. • The company faces increasing competitive pressure from new technologies and potential cybersecurity risks, adding volatility to its outlook. • Positives remain: healthy dividend yield (~4%) with strong dividend growth (40%), decent profitability, and continued revenue expansion. This change reflects portfolio rotation, not a sell signal. | communication-services | internet-content-information |