Sakata Seed Corporation: Solid Outfit But Solid Free Cash-Flow Generation Remains Amiss

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Summary

  • Sakata Seed Corporation operates in the Farm industry, focusing on seeds, plant breeding, and greenhouse facilities, with a strong international presence.
  • Changing weather patterns pose risks to profitability, despite Sakata's ability to trial new plant varieties globally.
  • Sakata's financials benefit from a weak Yen, but low free cash-flow conversion indicates poor earnings quality, making the stock not cheap.
  • Sakata's large cash balance supports ongoing investments, but improved cash-generation is needed; current rating is 'Hold'.

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Intro

Sakata Seed Corporation (OTCPK:SKSDF) is a seed & flower-orientated Japanese outfit in the Farm industry that operates in distinct segments. The company publishes gardening literature and produces & provides the likes of seeds, plant bulbs, plants & agriculture supplies in its home

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