1Lun·

Kikkoman - Basic consumption with moat

The Kikkoman $2801 (-2,06 %) share seems too interesting at the moment not to share my thoughts with you 🙂

I haven't looked at the consumer goods sector, but none of the big standard stocks seem particularly interesting to me ($NESN (+1,4 %) , $ULVR (+0,02 %) , etc.).

In addition, due to the exchange rate, I'm currently looking more closely at Japanese companies and have stumbled across Kikkoman.

Kikkoman is not only the absolute market leader in the soy sauce sector here, but is also one of the largest manufacturers of soy sauce in its home country of Japan, where the majority of sales are generated. Kikkoman also produces other products in the sauces and seasonings sector, all of which are also market leaders. Kikkoman has held this position for many years and it should be difficult for competitors to shake it.

Fundamental aspect:

Over the past 15 years, Kikkoman's P/E ratio has averaged over 30.

We are currently trading at around 21, which is well below the historical average.

Over the past ten years, Kikkoman has achieved average annual earnings growth of over 15%. Despite the current challenges posed by inflation and supply chain issues, the company has been able to further increase its profits, although a slowdown in profit growth is becoming apparent, which is probably also triggering the current correction.

Chart "Analysis

(I am definitely not a profit wheeler, so please forgive me if this is too simplistic😅)

From a technical point of view, the share has undergone a correction in recent months and is approaching a crucial support zone. The area around the 1300 yen mark (high - September 2018) has repeatedly served as strong support in the past (March 2021, June 2022, March 2023).

I think that a reversal at this support will take place this time as well.

Exchange rate

Another positive factor is the current favorable exchange rate between the euro and the yen. The yen is historically weak against the euro, which makes purchases of Japanese equities comparatively favorable for European investors.

I hope you enjoyed this brief assessment of $2801 (-2,06 %) and perhaps, like me, you have become aware of a great company that has so far received less attention, at least on this platform.

Sources:

Data and graphics from

https://aktienfinder.net/aktien-profil/Kikkoman-Aktie

and exchange rate from Google

25.08

Kikkoman

Compró 500 a 7,70 €

3850,00 €

11 Comentarios

D.S.@Propheteus

1Lun

Hmm 🤔 -25% share price in the last 12 months and only 1.9% dividend yield? Haven't found the moat or anything else interesting. Ok, maybe to further diversify the negeative assets in the portfolio?

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Olli@EisenEnte

1Lun

@Cato_Bamboo Kikkoman is not only the number one soy sauce brand in Germany, but is also the best-selling brand in Japan, where the majority of sales are generated. And this is despite the fact that, like Procter Gamble, the products tend to be in the mid-price segment. This is the moat. And a medium-term correction last year is one of the reasons why I find the timing interesting. Which other assets do you see as negative in the portfolio? The altcoins with a weighting of around 1.5%?

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stucky8@stucky8

1Lun

Interesting, I didn't even know the share yet, thanks for the post!

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Patrick Schäfer@Hotte1909

1Lun

Looks interesting. I'll add it to my watchlist

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NichtRelevant@NichtRelevant

1Lun

In any case, it's nice to be introduced to a stock that we've hardly ever focused on here in the forum. I think it's good and sounds good if you're looking for a stock in the food sector.

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GeldGenie@GeldGenie

1Lun

And did I miss the moat or did you not explain it? 😊

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Olli@EisenEnte

1Lun

@GeldGenie Kikkoman is not only the number one soy sauce manufacturer in our country, but also the absolute market leader in Japan with other products. And this despite the fact that they are in the mid-price segment. In other words, they are premium products at affordable prices. Similar to the products from Procter Gamble. The popularity in the domestic market ensures that there is hardly any serious competition.

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MEMO@MEMO1993

1Lun

I have had the company on my watchlist for some time. The valuation is down but still too expensive for me, I will use 18 kgv for my entry. You also forgot to say that they are not only the number 1 in soy sauces but also adapt the products or bring out new ones, homepage also really good. There are now more than 10 different sauces and something for everyone. They are also expanding the pipeline with soups and other simple dishes that taste really delicious. Conclusion: Super simple business model, stable sales, but still a little too expensive in every Asian household.

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GAR1986@GAR1986

1Lun

Healthy downward trend that led to the change in the P/E ratio, right?

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Cai-pirinha@Cai-pirinha

1Lun

@GAR1986 share price falls earnings rise... hm

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Olli@EisenEnte

1Lun

@GAR1986 That's the point, a medium-term correction is precisely the reason why I find the timing interesting.

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