Stocks that have jumped into Bitcoin treasury or other crypto related initiatives have been on fire. Some of them like Bitmine Immersion Technologies, Inc. (BMNR) and SharpLink Gaming, Inc. (SBET) have run over $100. But the original big gainer behind Strategy Incorporated (MSTR) was a Japanese listing called Metaplanet Inc. (MTPLF). It has been Japan's best performing stock and has increased by 7,500% since March 2024 after enacting its own aggressive Bitcoin treasury strategy and implementing crypto into its core business. LogProstyle Inc. (LGPS) is a U.S.-listed Japanese-based company that shares a lot of the same traits as Metaplanet. Not only that, it's a small float stock that is profitable and growing. So it has the incentive and ability to copy the Metaplanet business model and take off like it has. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1038 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.
Prior to its Bitcoin treasury strategy, Metaplanet was a struggling hotel management operator. LGPS is primarily in the real estate and renovation business in Japan, but also has a hotel management business. It owns four hotels with plans to expand globally. The company released fiscal year 2025 (ended March 31) results with the following highlights:
- Total revenue of JPY20,651 million (US$138 million) for the fiscal year of 2025, up 46% compared with JPY14,122 million in fiscal year 2024.
- Real estate revenue of JPY18,819 million (US$126 million) increased by 52% over the previous year.
- The number of real estate units sold was 187 units, an increase of 89 units from the previous year, of which 102 units were new condominium development units, an increase of 62 units from 2024. The number of renovated condominium units sold was 40, representing a decrease of two units from the previous year.
- Hotel revenue reached JPY1,249 million (US$8 million), up 20% from the previous year.
- Occupancy rate increased by 390 basis points to 74.7%, while average daily rate (ADR) for hotels operated by the company decreased by 13%.
- Gross profit reached JPY3,559 million (US$24 million), an increase of 34% from fiscal year 2024.
- Operating income of JPY1,343 million (US$9 million), up 43% from JPY939 million. Operating margin steady at 6.5%.
- EBITDA of JPY1,487 million (US$10 million) , up 45% from JPY1,019 million.
- Net income increased 133% to JPY754 million (US$5 million) from JPY324 million, and earnings per share grew by JPY19.39 to JPY34.76 (US$0.23 ).
With 46% growth and a $0.23 EPS, it's understandable why the stock price doubled from $0.84 to $1.70 on over 70 million shares traded on Monday upon release of the results. The stock price has consolidated and settled, creating a good entry point for those value investors who are smart enough to recognize the opportunity. LGPS is currently trading at a 7.4x earnings multiple despite the strong growth and profitability numbers across the board. The company has also enacted a share repurchase program of up to 1.1 million shares. This is significant given that the float is just 5.7 million shares.
Now consider the earnings multiple of Metaplanet, which is over 200x. Should LGPS enact its own crypto treasury strategy, the stock price has up to 3,000% upside potential just to get in line with Metaplanet's valuation. But even if it doesn't enact a crypto strategy, it is undeniably undervalued. Come for the profits, stay for crypto news potential.
Disclosure: We are long LGPS
No comments:
Post a Comment