Haven’t heard of D&M Holdings? Well, then maybe you’ve heard of D&M’s premium audio brands: McIntosh, Marantz, Denon, Boston Acoustics and more!

D&M trades on the Tokyo Exchange, TOPIX-1: 6735.

Shares of D&M surged 14% to Y407 intra-day Monday on a Daiwa Institute of Research upgrade to a “1″ from a “2″ with a target share price of Y600.

Daiwa cited D&M’s cheap valuation and its aggressive M&A strategy of building its high-end A/V brand portfolio leading to good times ahead. D&M is also expanding in car audio and focusing more on serving segments outside-the-home.

As is not uncommon in Japan following upgrades, shares of D&M were last at Y364 (-3.7%) midday Tuesday, exactly where they were on Friday and pretty much where they have been the past couple months after getting crushed in July.

So, D&M is trading at less than 10x current FY earnings and is right around 1x book.

D&M’s biggest rival is Harman International (NYSE: HAR). Harman has had a rough past couple months of trading due to a deal gone bad to take it private. Its shares most recently at $72, are off more than 40% from their calendar year peak of $125.

Head to head, Harman’s market cap is more than 10x that of D&M at $4.4B, while its annual sales are more than 4x and profits are not even worth comparing. Harman trades at 13.5x forward earnings and about 3.5x book. Harman’s operating profits are about double D&M’s at around 10%.

Generally speaking, D&M has an attractive valuation and is poised for solid growth based on its M&A strategy. The margins should improve over time and make D&M’s story more compelling. In the mean time, high-end audio doesn’t sound like a good segment to be in considering a slowdown in U.S. consumption and sustained weakness in domestic consumption. However, let’s not forget that D&M is at the highest of the high-end and therefore, it’s a mistake to associate its market with the broader market.

That said, D&M is not necessarily a screaming buy, but it is worth further consideration. What’s great is how shares can still be picked up on the cheap, even after an upgrade. The bad news, however, is if you want to buy a full 1,000 share trading unit, you’ll need to fork over enough funds that could instead be used to outfit your house with some of the company’s own equipment. Unless, that is if you are a high roller and can have some of both.