Japan: the quality stocks France never notices

2026-09-06 · By Lubin Danilo, founder of Lubin Investment

Three Japanese companies, a maker of cardiac guidewires, a vibration-testing specialist, and a cloud point-of-sale software vendor, currently pass nine or ten of my ten financial quality criteria, without ever being covered by financial media. A fourth shows an extremely low valuation I don't trust, for a specific reason I detail below.

Why so few Japanese stocks pass my screen

I score every stock against ten concrete financial criteria: is it profitable, do its sales and free cash flow (the cash actually left in the till once every bill and every investment is paid) grow over time, does it buy back its own shares rather than dilute them, is its debt manageable, is its return on invested capital solid. Japan is the world's second-largest stock market by number of listed companies, and my screen covers several thousand Japanese tickers. Despite that scale, only a handful pass nine or ten of my ten criteria at any given time, a market long criticized for weak returns on capital, cross-shareholdings between companies, and a historical reluctance toward share buybacks, three habits that directly weigh on the criteria I measure.

That scarcity makes the survivors more interesting. I checked today, ticker by ticker on my analysis tool rather than copying a cached ranking, four Japanese companies that had all reached a perfect score at some point in recent weeks. None of the three still holding the line is ever mentioned in French or English financial media, none carries a familiar three-letter ticker, and the fourth deserves a warning rather than a spot in the ranking.

Three names my site had never mentioned

Here are the three still holding up today, with the valuation my model assigns them. The right column compares today's price to my fair buy price, the level beyond which I consider a stock of that quality expensive.

Company (Ticker)	Sector	Quality score	Valuation (P/FCF)	Today's price verdict
Asahi Intecc (7747.T)	Cardiovascular medical devices	10 out of 10	30.8x	4.5% discount
Smaregi (4431.T)	Cloud point-of-sale software	9 out of 10	26.1x	4.1% discount
IMV Corporation (7760.T)	Vibration testing systems	9 out of 10	14.2x	4.3% discount

One detail jumps out immediately: all three sit within a few percentage points of my fair buy price, neither dirt cheap nor overpriced. The market has already spotted part of their quality, even without French coverage. This isn't a screaming bargain I'm handing you, it's a geographic blind spot.

Asahi Intecc (7747.T): the quiet champion of cardiac guidewires

Asahi Intecc makes guidewires and catheters used in minimally invasive cardiovascular procedures: a cardiologist threads this wire, thinner than a hair, through an artery to reach a blockage without opening the chest. Together with Boston Scientific, Terumo, Abbott and Medtronic, these five companies share roughly 65% of the global guidewire market. The barrier to entry isn't a single patent but tacit manufacturing know-how, the ability to produce an ultra-fine wire with extreme consistency, hard to copy even knowing the formula, combined with a durable preference among cardiologists for the brand they already trust in the operating room. In February 2025, Asahi Intecc launched its ASAHI Miracle Neo 3 wire in Europe, designed to improve safety in complex bifurcation rewiring, proof the company keeps investing in this niche rather than diversifying at random.

The most telling number isn't static, it's moving in the right direction. Asahi Intecc's free cash flow was negative in 2021, below one billion yen. Five years later it exceeds 32 billion yen, a trajectory that tracks revenue nearly doubling over the same period, driven by expansion into the US and Europe where robotically assisted cardiovascular procedures are multiplying and consuming more of these precision consumables. This is exactly the kind of mechanism I look for: a niche that looks boring from the outside, where structural demand (an aging population, the spread of minimally invasive surgery) drives growth without depending on a single contract or country.

Price follows that quality: at 30.8 times its annual free cash flow, Asahi Intecc is the priciest of the three, and it's the only one of my ten criteria it doesn't fully clear in my model (flagged as a watch point rather than a failure). The market is paying a premium for a rare moat and accelerating rather than slowing growth, which I judge justified as long as demand for minimally invasive cardiovascular surgery keeps growing. The risk to watch: near-total dependence on a single product family, without diversification into other medical device categories that would cushion a regulatory shock or less generous reimbursement in a major market.

Smaregi and IMV Corporation: real quality, but a missing lock-in

Smaregi sells cloud point-of-sale software to Japanese retailers and restaurants: over 54,900 active stores in early 2026, a figure growing alongside Japan's shift to cashless payments and its 2026 tax reform digitizing sales-tax refunds for tourists, a process that used to be largely manual. In March 2026, Smaregi launched Shusse-barai (literally "pay as you grow"), a service advancing up to 20 million yen in a single business day to a merchant, with no collateral or guarantor, relying on the merchant's actual payment history through its PAYGATE payment solution rather than a traditional bank file. It's the classic move from software vendor to lender: the company already knows its client's real-time revenue, so it can assess credit risk far faster than a traditional bank.

Its free cash flow has more than tenfold in four years (from 214 million yen in 2022 to over 2.4 billion in 2026), a compounding growth pattern typical of a subscription model where every new client adds to a recurring revenue base without erasing the previous ones. IMV Corporation, by contrast, sells vibration-testing systems: machines that simulate years of vibration, shock and temperature swings in a few hours, to verify an automotive part, an aerospace component or an electronic circuit will hold up before it ever enters real service. Its free cash flow had a flatly negative year in 2023 before tripling between 2023 and 2025, a far choppier profile than Smaregi's, consistent with a business billing large one-off equipment orders rather than smoothed monthly subscriptions.

Both dropped one point on my grid in recent weeks, from ten to nine out of ten: in both cases, the criterion that flipped concerns revenue growth per employee, a signal I track to spot whether growth comes from real productivity gains or simply from hiring. It isn't an alarm bell by itself, more a reminder that even a near-perfect score is a snapshot, not a permanent guarantee. On the qualitative side, IMV stands out for lacking a clear proprietary lock-in: manufacturing vibration-testing systems attracts other global suppliers capable of offering a comparable alternative, unlike Asahi Intecc where practitioner preference creates a real barrier. Smaregi does benefit from a genuine switching cost once a merchant has integrated its point-of-sale system into its accounting and payments, but that switching cost remains contestable against better-funded international cloud competitors.

A fourth candidate I prefer to set aside

A fourth company, Simplex Financial Holdings, a hedge-fund sponsor listed on the TOKYO PRO Market (a Tokyo Stock Exchange segment reserved for professional investors, with lighter disclosure requirements than the main board), also showed a perfect score a few weeks ago, and today shows a valuation of just 1.8 times its annual free cash flow, which would make it, if the figure were reliable, by far the cheapest and most profitable of the four. Before citing it as an opportunity, I checked its share count history over five years: 210 million in 2022, 6.4 million in 2023, 3.9 million in 2024, then 51 million in 2025. No real buyback program, however aggressive, produces that kind of sawtooth. It's the signature of a data problem, likely a stock split or reverse split not properly reflected in the series I use, not a real economic story.

My own model confirms the anomaly another way: it shows a discount of over 600% versus my fair buy price, a number that simply cannot exist for a real listed stock. On the business side, what Simplex Financial Holdings actually does is real and interesting: the company supports the development of a connection interface for wallets using JPYC, Japan's yen-denominated stablecoin, a sign of the broader tokenization movement in Japanese financial assets in 2026. But a reader buying on the strength of the displayed valuation number alone would be buying broken data, not a real gem. I'd rather show you why I'm excluding it than cite it unverified, exactly the method I recommend before trusting any aggregated number, mine or anyone else's.

Price: three stocks near fair value, none of them cheap

Line up the three multiples: 14.2x for IMV Corporation, 26.1x for Smaregi, 30.8x for Asahi Intecc. The ranking tracks almost exactly the moat strength I just described, from weakest (IMV, no clear proprietary lock-in) to strongest (Asahi Intecc, manufacturing know-how and practitioner preference). That's consistent: the market pays more for quality that's more likely to last. None of the three trades at a real discount, all three float within four or five percentage points of my fair buy price, which I read as fairly priced rather than an obvious opportunity. The real takeaway isn't "buy now", it's "here are three companies your broker will never surface for you." You can check each of these profiles live on my analysis tool, and see how I calculate a fair buy price in my full methodology.

Key takeaways

Asahi Intecc (7747.T): perfect score, the strongest moat of the three (ultra-fine manufacturing, cardiologist preference), highest valuation at 30.8x free cash flow, 4.5% discount to my fair buy price.
Smaregi (4431.T): nine out of ten criteria (down from ten), fastest free cash flow growth of the three, valued at 26.1x, 4.1% discount.
IMV Corporation (7760.T): nine out of ten criteria (down from ten), weakest moat, choppier free cash flow, lowest valuation at 14.2x, 4.3% discount.
Simplex Financial Holdings (7176.T): excluded from the ranking. Its share count history is inconsistent and my model shows a discount above 600%, a sign of broken data, not a real opportunity.
None of the three I kept trades at a real discount: the market has already spotted part of their quality, despite zero coverage in French or English financial media.

FAQ

How can I buy a Japanese stock like Asahi Intecc from outside Japan?

All three trade only on the Tokyo Stock Exchange, under their ticker followed by ".T". A broker offering international market access, such as Interactive Brokers, gives direct access. EUR/USD to yen conversion adds currency risk on top of each company's own business risk.

Why can a quality score drop from one month to the next?

My score recalculates ten criteria every time financial statements update. IMV Corporation and Smaregi both dropped from ten to nine out of ten after a single criterion slipped, revenue growth per employee, an indicator that can swing quarter to quarter without the business fundamentally deteriorating. A score is never a permanent fact, I always re-verify it before citing it.

Is Simplex Financial Holdings' very low valuation a real opportunity?

No, I don't believe it. This company's share count history swings inconsistently year to year, and my own model shows a discount above 600%, a number that's impossible for a real stock. That's a sign of a source-data problem, not an undervalued gem. I'd rather exclude it than cite a number I don't believe myself.

Does the Japanese market work differently from Western markets?

Since 2023, the Tokyo Stock Exchange has pressured listed companies trading below book value to improve capital returns, notably through more share buybacks, a practice historically far less common in Japan than in the US. This reform is progressing but unevenly, which partly explains why so few Japanese stocks still pass all of my capital-return and share-discipline criteria.

About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).