In light of Asian countries celebrating the Mid-Autumn Festival, five restaurant stocks with high GF Scores and are modestly undervalued based on GF Value as of Friday are McDonald’s Holdings Co. (Japan) Ltd. (TSE:2702, Financial), Guangzhou Restaurant Group Co. Ltd. (SHSE:603043, Financial), Arcland Service Holdings Co. Ltd. (TSE:3085, Financial), KFC Holdings Japan Ltd. (TSE:9873, Financial) and Fairwood Holdings Ltd. (HKSE:00052, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
Asian countries celebrate Mid-Autumn
The Mid-Autumn Festival takes place on the 15th day of the eighth lunar month. In 2022, the moon-centered festival takes place between Sept. 10-12.
Common traditions include honoring the moon, eating mooncakes, carrying lanterns and preparing for the autumn harvest season. As such, investors may find value opportunities in Asian restaurant stocks that have a high GF Score and are modestly undervalued based on the GF Value.
GuruFocus’ comprehensive scoring system has been found to closely correlate with the long-term performance of stocks based on backtesting from 2006 to 2021. The GF Score ranges from 0 to 100, with 100 as the highest score.
Each of the five GF Score components: financial strength, profitability rank, growth rank, momentum rank and GF Value rank, range from 0 to 10, with 10 as the highest score. The GF Value rank is based on the GF Value measure, which is patterned after Peter Lynch’s earnings line. GuruFocus’ research has found that, on average, stocks that have price-to-GF Value ratios of between 0.5 and 0.8 have higher performance than stocks with price-to-GF Value ratios outside this range.
McDonald’s Holdings
Shares of McDonald’s Holdings (TSE:2702, Financial) traded around 4,925 yen ($34.51), showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.82.
The company has a license to operate McDonald’s Corp. (MCD, Financial) restaurants in Japan. The stock has a GF Score of 91 out of 100 based on a financial strength rank of 10 out of 10, a momentum rank of 7 out of 10 and a rank of 8 out of 10 for profitability, growth and GF Value.
The iShares MSCI ACWI ex U.S. ETF (Trades, Portfolio) has a position in McDonald’s Holdings.
Guangzhou Restaurant Group
Shares of Guangzhou Restaurant Group (SHSE:603043, Financial) traded around 28.78 yuan ($4.16), showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.77.
The Guangzhou, Guangdong-based company operates restaurants through brands including Guangzhou Restaurant. The stock has a GF Score of 94 out of 100 based on a rank of 10 out of 10 for GF Value and momentum, a profitability rank of 9 out of 10 and a rank of 8 out of 10 for financial strength and growth.
Arcland Service Holdings
Shares of Arcland Service (TSE:3085, Financial) traded around 2,060 yen, showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.81.
The Japanese restaurant and franchise store company has a GF Score of 96 out of 100 based on a rank of 10 out of 10 for profitability and growth, a GF Value rank of 8 out of 10, a financial strength rank of 7 out of 10 and a momentum rank of 5 out of 10.
KFC Holdings Japan
Shares of KFC Holdings Japan (TSE:9873, Financial) traded around 2753 yen, showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.87.
The Japanese chicken and burger restaurant company has a GF Score of 89 out of 100 based on a GF Value rank of 10 out of 10, a financial strength rank of 9 out of 10, a profitability rank of 7 out of 10 and a rank of 8 out of 10 for growth and momentum.
Fairwood Holdings
Shares of Fairwood Holdings (HKSE:00052, Financial) traded around 13.02 Hong Kong dollars ($1.66), showing the stock is modestly undervalued based on Friday’s price-to-GF Value ratio of 0.73.
The Hong Kong-based fast-food restaurant company has a GF Score of 85 out of 100 based on a profitability rank of 8 out of 10, a GF Value rank of 6 out of 10, a financial strength rank of 5 out of 10 and a rank of 7 out of 10 for growth and momentum.
