7595 Argo Graphics
- Jul 11, 2025
- 1 min read
Algo Graphics sells French "Dassault" CAD software to automobile manufacturers and IBM manufacturing process control systems to semiconductor manufacturers.
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Oct 1, Argo Graphics announced shareholder perk, popular "Quo Card" convertible into 1000 yen of cash
As of Aug 11, 2025, the situation with this company is:
strategic partner/stable shareholder SCSK is gone after selling into the buyback
Fidelity (FMR LLC) keeps buying the stock such that it is now the top shareholder w/13% stake (bought as recently as July 11, 2025)
stock sold off appx 5% on back of 1Q result but the yoy numbers looked bad largely because the 1Q of previous yr was really good due to one-off large order from public sector
at 4750 yen/share, net cash (33 bil yen) exceeds 1/3 of the market cap (95 bil yen)
Despite a 18% EBIT CAGR growth trajectory over the past 8 years, the co maintains a modest valuation of 6x EV/EBIT and 13x…
Here is a VIC write up on this stock https://valueinvestorsclub.com/idea/Argo_Graphics/9697984760
The article provides a good overview of its business and does a good job in financial analysis.
What I like, distributor of engineering and scientific software, value added services and High-performance computing cluster rental to run simulation. Very sticky, highly recurring (stock-based) and almost no churn.
Argo is the largest distributor of IBM's MES platform Siview in Japan. This MES platform is mainly for Semiconductor Fabs Toshiba ( Kioxia).
one tidbit.. not related to Argo Graphics..
According to this post https://www.linkedin.com/posts/masahide-hirouchi-64ba7234_ibm-siview-standard%E3%81%AE%E7%99%BA%E8%A1%A8-activity-7219589371551698944-19AM , the IBM's MES platform SiView was developed by IBM Japan Team.
Argo Graphics own 50% share in Jedat Inc (3841) Developer and seller of EDA software. SX-Meister, an…
In spring, Ascender Capital submitted shareholder proposal asking for 400 yen / share dividend and up to 26 bil yen buyback
Not clear whether the management's decision in May to buy back almost entire stake held by 21% shareholder SCSK was influenced by this pressure. But the mgmt certainly used this buyback as reason to reject any other capital return proposal
at 5080/share, 113.6 bil yen mkt cap vs 33 bil yen* net cash
14.37x per / 1.89x pbr / 3.15% dividend
*As of March 31, 2025, the net cash was 51 bil yen. But the co bought back almost entire stake from SCSK - Sumitomo Corp affiliated mega SIer - spending 18.5 bil yen cash in July.