Sunday 15 September 2013

Analysis of Asics

A Japanese sports shoe company

Company: Asics

Business: A Japanese company that are manufacturing and selling sports goods. Hmmm... I´m not happy wit that they do not very clearly show the brands that they have besides from Asics. But from my previous investigations I knew that Onitsuka Tiger belonged to Asics and in the yearly report they also mention Haglöfs especially due to that the sales of their waterproof wear had been very good in 2012.

Active: World-wide and are trying to push the emerging markets. Without doubt their strongest base is still Japan and when you add up the sales from Europe and USA then that is only slightly more then the sales in Japan.

P/E: 25.5

This company was analysed due to a request that can be found here.

contrarian values of P/E, P/B, ROE as well as dividend
The P/E of Asics is high with 25.5 and the P/B is far too high with 2.7 which leads to that it is of no interest according to Graham. The earnings to sales are so, so with 5% and the ROE is up at 11% which is ok but also not more. The book to debt is at 1.1 so fully acceptable. Their yearly growth in the last five years has been 2.8% which maybe can be considered as high since they have had their Headquarter in Japan for the last 20 years when they have had deflation and at least 40% of their sales are connected to Japan. The motivated P/E becomes 12 to 14 which means that the stock is overvalued on the market today. The pay also a silly dividend of 0.7% which represents a bit more than 17% of their earnings so there is space to improve.
Conclusion: I would not buy Asics since it does not fulfil my criteria but I find it to be a good company and I can imagine that they will have a great future with the inflation push that they are now doing in Japan.

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