These are the immortal words of John “Hannibal” Smith, the leader of The A team, the fictional television series starring George Peppard and Mr. T that ran for five seasons in the mid-1980s. It’s a line I’ve never forgotten.
On Monday, obscure Japanese investment firm Orix Corp. (IX), had the seventh highest standard deviation at 3.38, translating to a gain of 5.23% on the day. More importantly, the company’s ADR (American Depositary Receipt) hit an all-time high of $34.31 before closing trading at $33.99.
I use Peppard’s favorite words because I have long been bullish on the Japanese company and its stock. In August 2024, I recommended its ADR even though it had just hit its 37th new 52-week high in the previous 12 months at $25.
In the 17 months since then, its shares have gained 36%, for an annualized return of 25.4%. Add to that a healthy 3.0% dividend yield, and IX stock remains a very attractive long-term holding.
There are many reasons to like Orix. Despite flying under the radar, here’s why it’s still a good buy despite hitting an all-time high.
If not for Warren Buffett’s foray into five Japanese trading companies in July 2019, they represent 13.1% of Berkshire Hathaway (BRK.B).Stock portfolio of $331 billion. I probably wouldn’t have focused more on this Japanese company that does a lot of business in the US.
I remain obsessed with businesses with many unrelated moving parts. Orix is definitely that.
“If you visit its investor relations site, you’ll see that it has 10 operating segments, so you could consider it a financial conglomerate. However, when you look at its Q2 2024 results, diversification is relatively balanced across all 10,” I wrote.
I concluded my little Orix blurb by saying, “This is an unknown Berkshire Hathaway.”
As I mentioned, its third-quarter 2026 results beat Wall Street estimates. Overall, revenue was $5.42 billion, $320 million above consensus, while earnings per share were $0.68, one cent above analyst expectations.
In the nine months ended December 31, 2025, the company’s revenue rose 12% to 2.41 trillion Japanese yen ($15.42 billion), while net profit rose 43% to 567.72 billion Japanese yen ($3.63 billion).
As I said in 2024, its largest operating segment was Insurance. In the last nine months, its Banking and Credit business outperformed its Insurance business, with 3.26 trillion Japanese yen ($20.86 billion) in assets, about 2% more than its Insurance business.
All but one of its operating segments (Orix Europe) have at least 1 trillion Japanese yen in assets.
Of the 10 operating segments, the three with the highest segment gains over the past nine months are Environment and Energy, Private Equity Investment and Concessions, and Corporate Financial Services and Maintenance Leasing. Together, these three accounted for segment earnings of 296.35 billion Japanese yen ($1.90 billion), or 50% of the company’s total.
Of course, with many moving parts, these numbers will change over time. This is especially true for the concessions and private equity investment segment, where results are unpredictable.
But that’s why I love it. Like a good sports team, there is always something contributing to keep the wins coming.
Given Barchart’s largely US audience, it makes sense to focus some of my thoughts on its US business, which offers alternative asset management through its subsidiaries NXT Capital, Hilco Global, Boston Financial and Lument.
Launched in 1981, it now manages nearly $95 billion in assets. Although it is not Brookfield (BN)plays an important role in the American mid-market.
In the first nine months of 2025, Orix USA generated 13.9 billion Japanese yen ($89.5 million) in operating profits from 2.09 trillion Japanese yen ($13.35 billion) in assets, a return on assets of 0.67%, up from 1.75% a year earlier.
Consider this: Orix USA became an operating segment for reporting purposes in fiscal 2021 (March year-end). At the time, it had 1.15 trillion Japanese yen ($7.38 billion) in assets.
In 4.75 years, it has grown to 2.09 trillion Japanese yen ($13.35 billion), with a compound annual growth rate (CAGR) of 12.7%. In my opinion, that’s a healthy growth rate.
Over the last decade, Orix’s valuation metrics have become more expensive.
For example, in March 2016, its enterprise value was 2.11 times trailing-12-month earnings, according to S&P Global Market Intelligence. In March 2021, the multiple was 2.65x; today it is 3.50x. At the same time, its enterprise value/EBIT (earnings before interest, taxes, depreciation and amortization) multiple increased from 14.49 times in 2016 to 21.78 times in 2021, and is now 24.59 times.
However, over the past decade, while its revenue declined from $21.08 billion in 2016 to $19.96 billion in the 12 months ended December 31, 2025, its EBIT rose from $3.34 billion to $4.1 billion as of December 31, an EBIT margin of 20.54%, up 470 basis points.
It is more profitable now than ever. I don’t see that changing. In my opinion, it deserves a higher multiple and is definitely NOT a bullish price surprise.
I really like ORIX’s prospects over the next decade. Do yourself a favor and do some reading on their investor relations website and in their 20-Fs. You’ll be glad you did.
On the date of publication, Will Ashworth had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
