Marubeni: Undervalued Trading House with Buffett's Seal of Approval

Marubeni, a Japanese trading house, has rallied by 35% since March 2023. As a Buffett-certified company, it is undervalued. The article suggests that Marubeni's recent performance is a positive indicator for the company's future prospects.

Marubeni Corporation (TSE: 8002), a prominent Japanese trading house, has witnessed a significant rally, surging by 35% since March 2023. The stock's recent performance has garnered attention, particularly given its status as a Buffett-certified company, suggesting that it may be undervalued. This article explores Marubeni's recent performance and its potential implications for investors.

Marubeni's share price stands at ¥2,841, while its GuruFocus (GF) Value is ¥2,296.74. According to GuruFocus, the current stock price is undervalued relative to its GF Value [1]. The GF Value represents the intrinsic value of a stock, derived from historical multiples and future growth projections, adjusted for past returns and growth. This valuation method has been verified through backtesting and model portfolios.

Warren Buffett, the legendary investor, has invested heavily in Marubeni through Berkshire Hathaway. Buffett's interest in Marubeni is part of a broader trend where Japanese trading houses are attracting investor interest due to their strong business models and shareholder returns [2]. Berkshire Hathaway's investments in Marubeni and other Japanese trading houses, such as Mitsubishi and Mitsui, indicate confidence in these companies' long-term prospects.

Marubeni's recent earnings reports have shown resilience despite profitability declines due to yen appreciation and segment-specific challenges. The company has reported robust equity growth and improved debt ratios, demonstrating its ability to navigate challenges [3]. Furthermore, Marubeni's strategic partnership with ExxonMobil to supply low-carbon ammonia underscores its commitment to sustainability and innovative business models [4].

Analysts have upgraded Marubeni's stock from a sell candidate to a hold/accumulate position, suggesting that the stock's recent performance is a positive indicator. The stock price has gained 0.159% on the last trading day, rising from ¥2,836.50 to ¥2,841.00. The stock has risen in 6 of the last 10 days and is up by 1.86% over the past 2 weeks [5].

In conclusion, Marubeni Corporation's recent rally and Buffett's investment in the company suggest that it may be undervalued. The company's strong business fundamentals, resilience in the face of challenges, and strategic partnerships position it favorably for continued growth. Investors should closely monitor Marubeni's performance and consider its potential as a long-term investment.

References:
[1] https://www.gurufocus.com/stock/TSE:8002/valuation
[2] https://finance.yahoo.com/quote/MARUF/news/
[3] https://www.gurufocus.com/stock/TSE:8002/valuation
[4] https://www.gurufocus.com/stock/TSE:8002/valuation
[5] https://stockinvest.us/stock/8002.T