CAPCOM CO LTD is a leading Japanese video game developer and publisher. The company was founded in 1979 and has since then created a portfolio of world-renowned titles such as Resident Evil, Monster Hunter, and Street Fighter. As of April 18, 2023, the company's stock, ticker 9697, is trading on the Tokyo Stock Exchange at a market capitalization of JPY 2.41 trillion.
From a technical perspective, CAPCOM's stock has been performing well, hitting new all-time highs in recent months. The stock price has been trending upwards since the end of 2021 and has gained over 45% year-to-date. The stock is currently trading above its 50-day moving average (MA) of JPY 6,830, which is above its 200-day MA of JPY 6,375. This indicates that the stock is in an uptrend and has bullish momentum.
In terms of financials, CAPCOM CO LTD has a price-to-earnings (P/E) ratio of 37.3, which is higher than the industry average of 30.7. This indicates that the market is willing to pay a premium for the company's earnings. CAPCOM has a dividend yield of 0.7%, which is lower than the industry average of 1.3%. While the dividend yield is lower, the company has consistently increased its dividend payouts over the years, reflecting its commitment to rewarding its shareholders.
CAPCOM has a strong free cash flow of JPY 48.7 billion as of the end of the fiscal year 2022. This represents a significant increase from the JPY 25.8 billion reported in the previous fiscal year. The company's strong free cash flow provides it with the financial flexibility to invest in growth opportunities, pay dividends, and reduce debt.
The company's current liabilities are JPY 23.3 billion as of the end of the fiscal year 2022, which is significantly lower than its current assets of JPY 114.7 billion. This indicates that the company has a strong ability to meet its short-term obligations.
There are several reasons to consider taking a long position in the company's stock:
1. Strong Technical Performance: The stock has been hitting new all-time highs and has been in an uptrend with bullish momentum. This suggests that the market is positive about the company's growth prospects and future earnings potential.
2. Growing Free Cash Flow: CAPCOM has reported a strong free cash flow, which indicates that the company has the financial flexibility to invest in growth opportunities, pay dividends, and reduce debt. This is a positive sign for investors, as it suggests that the company is well-positioned to generate sustainable long-term growth.
3. Solid Ability to Meet Short-term Obligations: The company's current liabilities are significantly lower than its current assets, indicating that the company has a solid ability to meet its short-term obligations. This provides investors with confidence that the company can manage its cash flow effectively.
4. Strong Portfolio of Successful Titles: CAPCOM has a strong portfolio of successful video game titles, such as Resident Evil, Monster Hunter, and Street Fighter, which have a loyal following and strong brand recognition. This can provide a stable source of revenue and long-term growth potential for the company.
In summary, CAPCOM CO LTD is a solid company with a promising outlook for the future. The company has a strong technical performance, growing free cash flow, solid ability to meet its short-term obligations, and a strong portfolio of successful titles. These factors make it an attractive investment opportunity for long-term investors looking to gain exposure to the video game industry.
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