Mitsui High-Tec: Price target raised by 7.14% to 11,730.00

The average price target for Mitsui High-Tec (TYO:6966) has been revised to 11,730.00 yen per share, which represents an increase of 7.14% compared to the previous estimate of 10,948.00 yen from June 1, 2023.

This target is an average of several projections provided by analysts, with ranges from a minimum of 7,676.00 to a maximum of 14,700.00 yen per share. The new target represents a potential increase of 19.33% from the last reported closing price of 9,830.00 yen.

I find it interesting that, despite this analytical optimism, the company maintains a rather modest dividend yield of 0.73%. Its dividend payout ratio is barely 0.15, which means they are retaining most of their earnings. Are they really investing in growth or just accumulating cash? The 3-year dividend growth rate is 11%, but starting from such a low base, it doesn’t impress much.

What I find most revealing is the sentiment of the funds. There are 59 institutions reporting positions in Mitsui High-Tec, unchanged from the previous quarter. However, the average weight in portfolios dedicated to this stock has decreased by 20.86%, now standing at just 0.04%. This suggests a significant loss of institutional confidence, although paradoxically, the total shares held by institutions increased by 7.50% to 1.257 million.

Among the main institutional shareholders are passive funds such as the Vanguard Total International Stock Index and the Vanguard Developed Markets Index, indicating that a large part of the institutional ownership comes simply from the company's inclusion in indices, not from active investment decisions.

In my opinion, there is a clear disconnect between analysts' optimism and institutional caution. Perhaps investors should consider this contrast before getting carried away by the appealing target price.