Starting next week at the Rugby World Cup and on the horizon of the 2020 Olympics, Japan will become the center of attention for many around the world in the coming months.
For investors, the long-term performance of investment firms concentrated in the region is gratifying, as Japanese companies and Japanese small companies reported returns of 250 and 195 respectively in the past ten years.
But the returns of the past 12 months have been negative, and many investors believe that Japanese stocks are not valued. Can you imagine being an attractive entry point now? AIC spoke to leaders of Japanese investment companies about their investment behavior, where they are looking for opportunities, the Rugby World Cup and the Olympic Impact and their vision for Japan.
Investment approach
Joe Bauernfreund, Manager, AVI Japan Opportunity Trust, said: "At AVI, we find that we are investing in poorly researched and poorly understood companies. This approach leads us to small-cap Japanese companies, a poorly covered market segment. Of the 28 companies Of our portfolio, only four are covered by more than one analyst and, due to the general hatred of investors for Japan, not all of them are liked by all, which allows us to find extraordinarily low levels in good companies.Quality and cash flow "
Mathew Brett, director of the Bailey Gifford Japan Trust, said: "We are low-growth, low-growth investors. Our goal is to have a strong history in the industry, strong competitive positions, attractive financials and to be considered a well-managed company, once that we are sure that we have a strong distinction in the long-term potential of the company, we buy shares and then hold them to benefit from the growth of the following businesses.
"Atlantis Japan's growth investment behavior is based on the assumption that long-term revenue growth creates asset prices," said Takiko Sitashi, chief advisor to Atlantis Japan's growth fund. . The investment advisor, based on the development of Atlantis Investment Research Corporation (AIRC), uses a low stock option investment style with decisions based on the initial research of the property. This style may, but not necessarily, create a portfolio bias towards small and medium-sized investment firms. "
Opportunities
"The Japanese economy is undergoing major structural changes, which has led to many significant investment opportunities in the health services, technology and services sectors," said Takiko Sitashi, senior advisor to the Atlantis Japan Growth Fund. For example, Deployment Holding, the world leader in recruiting and other human resources functions, and Bingo4.com, a trusted website for lawyers and accountants. In the sector, our investments include long-term care provider Solosto and the drug detector Peptirium. We anticipate continued revenue growth for LaserTech and Tokyo Electron semiconductor production equipment collectors. "
Matthew Brett, director of the Bailey Gifford Japan Trust, said: "The two current areas of investment for the Bailey Gifford Japan Trust are Internet and industrial automation companies. In total, they represent approximately 40% of the portfolio. For example, we are very We are excited about SoftBank, which we believe has investments around the world, including large investments in Alibaba, Arima, and many attractive companies, which trade close to 50% of these investments in total, and Son of the Very precious M. Plus, we love it! FANUC, which is one of the world's leading robotics companies, able to accelerate its growth. See how robotics evolves into new industries and applications and where management is beginning to make a lot of money to stakeholders. "
Nicholas Price, director of the Fidelity Japan Trust, said: "Although the overall ownership structure of the company has not changed significantly, I have selectively updated positions in semiconductor and component maker companies." Investment theories, for example, in companies that can define value because internal change leads to a period of growth restart. A prime example is Endoscope maker Olympus, which is implementing a long-term restructuring plan to increase the profitability of "Olympus" and improve investment efficiency. I am always looking for opportunities to invest in innovative companies in the pre-IP stage. On the contrary, I have reduced the storage of machines and chemicals where the balance risk / performance was impaired and the temporary increase seems limited. n I have actively made profits in successful companies in the medical and retail technology sectors. "
Nicholas Vandling, JPMorgan's Japanese investment team manager, said: "We are currently finding exciting opportunities to invest in the areas of structural growth such as e-commerce, automation, and the opportunities created by opportunistic citizens, as well as companies that are involved. Support development. Shareholder actions. "
Joe Bournfreund, Director of AVI Japan Opportunity Trust, said: "Fujitech is a global lift manufacturer that sells to Japan, China, Southeast Asia, North America and Europe. The most exciting aspect of the business is the conservation revenue that Fujitec has after the installation. These maintenance contracts can last for decades, generating steady and repetitive revenue, which is why Fujitec's international partners trade the company's earnings value in advance of the interest and tax deadline 20x. Running the same business model, only multiplies by 5x.The logistics balance sheet is most likely to be invested, at this point. Nai we actually 56% of their portfolios invested in cash and listed warrants, while the benefits, high quality, low business practices are exposed, while earn interest. 4%. "
Impact of the Rugby World Cup and the 2020 Olympics
"The impact of the World Cup and the Olympics will be at least doubled. First, nearly two trillion yen have been spent on related infrastructure such as stadiums and facilities, estimates suggest that these costs will be met," said Takiko Sitashi, chief adviser for the Atlantis Japan Growth Fund. In 2017-2019, the impact has been high and the impact has been largely achieved. Secondly, the flow of tourism to the interior has a high tendency in the last three to four years due to reduction of visa restrictions, low cost airports and promotion of government. However, the rise of the Olympics is likely to raise the audience to over 40 million in government. The flow should keep Japan's status as an attractive tourist destination for years to come. "
Nicholas Price, director of the Fidelity Japan Trust, said: "It is great to see the world's largest sporting event here in Japan and I will look at it interestingly. Although the past and past effects of these two events are difficult to quantify. There are, but must be, economic benefits from investing. Getting into tourism and construction. However, this is not a significant investment in the portfolio. "
"We are seeing a very long-lasting impact from rugby and the Olympics," said Nicholas Vandling, director of JPMorgan's Japanese investment trust. We are looking for a long-term investment. That said, measures related to the sale of Cassius and Japanese brands such as Shiseido and fast retail should be useful and offer long-term sustainability. "
Panorama
"Perhaps the biggest challenge that Japan will face in the medium term that Japan will face in the medium term is an aging population," said Takiko Sitashi, senior adviser to the Atlantic Japan Growth Fund. Participating in the workforce to some extent eliminates the negative effects of the devastation.This development already creates significant social change, especially around public finance and welfare spending priorities.
"In addition to the general ledger, Japan continues to post significant ongoing account payments, is politically stable, and has a deep pool of money laundering. The stock market, at a 12-bar rate higher than the earnings ratio, seems to have gone unnoticed. Japan is, unfortunately, in the politically volatile corner of Northeast Asia, which shares the four nuclear powers, and the relationship is very high, especially in the rush of managing advanced companies. Is remarkable and beyond the influence of Japan. "
Matthew Brett, Bailey Gifford Japan Trust Manager, said: "We believe that the Japanese stock market has some very attractive individual businesses and that the long-term prospects for the stock of these companies are as good as the quality companies listed. "Everywhere in the world."
Japan's Fidelity Test Manager, Nicholas Price, said: "Japanese stocks remain behind their international peers this year due to uncertainty over trade disputes between the United States. The possibility of corporate earnings affecting the USA and China and the global economy. While the analyst review index has already reached its vertical end and earnings trends should stabilize in the coming quarters, stock prices are likely in a steady stream of political news.
"While there is no exemption for foreign headwinds, the Japanese economy remains stable. Confidence among Japanese producers is obviously weak, but maintains sentiment in the non-productive segment. Working conditions are tight, with demand rising. With job offers to record-level applicants.The investment cost plans are funded by non-cyclical factors such as labor-saving technology investment and research and development.The Bank of Japan has a very suitable position and will have the tax deduction of the 2019 2019 October October is implemented to reduce the impact of consumer taxes that vary from ٪ to..
"From a valuation perspective, Japanese stocks traded at a significant risk level in late 2018 and future earnings are seen to be about 12 times less valuable. With valuations that test historical engagement in certain segments of the market, there are opportunities. Have the ability to handle the distortions between the temporal sense and the intermediate basis. "
Nicholas Vandling, JPMorgan's Japanese investment team manager, said: "Japan's outlook for Japan is very different. Against the backdrop of global growth and slower revenue growth in Japan's cyclical sectors, TOPIX values remain lower than their history, and other major markets. In the political arena, Japan continues to advance in tourism, free trade, and corporate governance. The market is likely to give companies better governance policies, including stakeholder returns, internal controls and disclosures. "
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