The Armchair Trader has spent the last two weeks in Japan, travelling around the country. Here are five of the best Japanese companies which have caught our eye, currently trading in Tokyo.
Japanese companies continue to benefit from the cheap yen which has made the economy extremely competitive. A litre of beer is selling in Tokyo for roughly £2.50. On top of the cheap currency, the Japanese government is leaning hard on listed companies to reform their governance and become more responsive to shareholders. It is a conducive environment for investment.
For this subscriber report we have focused on large cap stocks, which will be easier for non-Japanese investors to buy directly on retail platforms.
Daiichi Sankyo [4568]
Healthcare provider Daiichi Sankyo has seen its shares come off since the summer, but the stock is still up a solid 25% approximately YTD. We see some very significant upside for the company and believe it has been oversold. Daiichi Sankyo is a major manufacturer of pharmaceutical products which has delivered some good numbers to the market recently. What's driving the selling right now? We suspect the decline in free cash flow. But this is setting Daiichi Sankyo up for some further gains as we move towards the end of the year.
Kikkoman [2801]
Widely recognised outside Japan, largely for its soy sauce products, Kikkoman is a huge food retailer in the Asia Pacific region with arguably one of the best international foods brands in the business. The drop in shares over the late summer has again set up a potential opportunity for investors to get into the stock and pick up some easy returns going into 2025. Kikkoman is currently sporting 8% revenue growth and a dividend yield of 1.26%. It continues to perform well against its peers in the foods sector.
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