Why Fujifilm (FUJIY) Is A Must-Add Stock To Your Portfolio?

The equity universe has been witnessing an upward trend, of late, recording gains of 1.4%, 1.7% and 1.3% for the S&P 500, Nasdaq and Dow Jones Industrial Average, respectively, over the last month.

The steadily improving U.S. economy will likely bring to the forefront some winners across the market this year. However, prevalent headwinds such as oil price fluctuations, simmering tension with North Korea and the damaging hurricanes remain major causes of concern.

Consequently, investors must not invest their money on typical bets without a clear roadmap.

Among the numerous potential gainers, adding FUJIFILM Holdings Corporation (OTC:FUJIY) to your portfolio would likely be a promising move.

Over the last three months, shares of this Zacks Rank #1 (Strong Buy) company yielded a return of 7.3%, outperforming 2.9% growth recorded by the sector.

Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable VGM Score A.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Reasons for the Bullish Run

VISION2019 Plan: This is the new three-year (fiscal 2018-2020) medium-term management program introduced this August. The program has been implemented to reinforce the company’s near-term competency on the back of sustainable growth across each business segment.

The Imaging Solutions business will strengthen on the back of the launch of competitive products which incorporate proprietary technologies to develop photographic cultures, while ensuring stable profit generation.

Information Solutions’ top- and bottom-line performance will likely be sturdy, supported by the improved performance of the Medical systems and Bio CDMO business. Notably, Fujifilm stated that under this program, the company will fund additional research and development investments in a bid to fortify the Pharmaceutical and Regenerative medicine business going forward.

Documents Solutions’ results would improve on the back of corporate structure solidification. The segments’ ratio of operating income will likely be 10% by fiscal 2021.

Notably, under the VISION2019 plan, Fujifilm will likely provide increased returns to its shareholders through new dividend and share buyback offers, over the next three years. The company anticipates repurchasing shares worth ¥300 billion by fiscal 2020. In addition, dividend would be hiked nearly 35.7% to ¥95 per share in fiscal 2020.

By fiscal 2020, the VISION2019 program is anticipated to boost Fujifilm’s revenues, operating income and net income by 12%, 33.5% and 14.1%, respectively.

Business Buyouts: Fujifilm believes its strategic business acquisitions will likely continue to bolster revenues in the quarters ahead. For instance, in April 2017, the company acquired Wako Pure Chemical Industries Ltd. (Wako). The company noted that this move helped in boosting sales of its chemical and reagents products in first-quarter fiscal 2018 (ended June 2017). Fujifilm anticipates that it would further improve revenues and realize decent amount of synergies on the back of the Wako integration in the near term.

Revenue Growth: Fujifilm intends to drive its near-term top-line results backed by the VISION2019 program, strategic acquisitions, sturdy healthcare, document and highly functional market demand, and calculated sales promotion activities.

Notably, the stock’s projected revenue growth for fiscal 2018 and fiscal 2019 are currently pegged at 2.1% and 1.2%, respectively.

Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Fujifilm moved north 4.2% to $2.76 and 6.7% to $3.02 for fiscal 2018 and 2019, respectively.

The upward earnings estimate revision indicates positive sentiments and substantiates the Zacks Rank #1 for this stock.

The stock’s projected EPS growth for fiscal 2018 and fiscal 2019 currently stands at nearly 1% and 9.4%, respectively.

Other Stocks to Consider

Other top-ranked stocks in the industry are listed below:

ACI Worldwide, Inc. (NASDAQ:ACIW) has an average positive earnings surprise of 31.25% for the last four quarters.

Axcelis Technologies, Inc. (NASDAQ:ACLS) generated an average positive earnings surprise of 35.04% over the trailing four quarters.

ADTRAN, Inc. (NASDAQ:ADTN) pulled off an average positive earnings surprise of 41.21% during the same time period.

All three stocks currently carry a Zacks Rank #2 (Buy).

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