Disclaimer: This content is for informational purposes only, not investment advice. I may own equities mentioned in this article. Investing involves risk, so always do your own research before buying or selling any securities.
I love the Swedish podcast Kvalitetsaktiepodden. It is a deep-value podcast that never ever ever stray from their mission to only buy undervalued equities with incredible growth, sturdy balance sheets and products you understand!
I copied their magical stock screener formula (ROE over 15%, an EBIT margin above 10%, consistent multi-year growth, and Net Debt/EBITDA below 2.5, sorting the qualifiers by their combined rank of highest Return on Capital and lowest EV/EBIT), and the company that came out on top was Mizuho Medy.
Mizuho Medy is a test kit maker from Tosu in tiny Saga Prefecture with around 196 employees. And no, there are no connection to any other companies named Mizuho, e.g. one of Japan’s largest banks.
Why is the stock so cheap despite incredible growth you may ask? Because during the Covid pandemic, the company made a fortune selling overpriced Covid test kits. After the pandemic, shareholders retreated, thinking the good times were over. Since it is a small-cap stock, it likely just got forgotten, despite selling record amounts of kits every year since!
