Recently prominent investors such as Warren Buffet have been investing large sums of money in Japanese stocks. This got the investing community fired up and chat rooms, Youtube channels, and news sites started publishing content about the Japanese market.
There is a plethora of companies to choose from in the Japanese market and you might find yourself being overwhelmed by them. No need to worry this article has you covered!
Tokyo Electron Ltd
In an article written by Brandie E Blackler called Top 5 Best Japanese Stocks to Watch 2023 she recommends that you purchase shares in Tokyo Electron Ltd, because of several reasons such as the company already having persuaded companies such as Samsung and Intel to become their customers.
Tokyo Electron Ltd dispenses both instruments and assistance to companies in the semiconductor industry. These products are mainly systems that clean, wafer systems and coaters. You should consider purchasing shares in this company because the industry of semiconductors is expanding rapidly and it is in high demand because semiconductors are used in weapons, and many devices.
Some thing to be aware of before you decide to purchase shares in Tokyo Electron is that US restrictions on certain types of transport can potentially negatively impact the company. Recessions and cutdowns will probably also affect the company heavily such as monetary policies that are in effect today.
Nippon Suisan Kaisha Ltd
In the same article called Top 5 Best Japanese Stocks to Watch 2023, it is written that Nippon Suisan Kaisha is most recognized as Nissui Corporation, the name they had before Nippon Suisan Kaisha Ltd. They produce seafood that now is more important than ever because the security around food has become an increased priority for many governments.
Nilsson Suisan Kaisha Ltd sells its products to more than 70 different countries. The demand for food is always high so therefore their products are in high demand. Over the years the stock has offered stability to the shareholders and is therefore considered a more defensive investment.
Unfortunately, the seafood business has many risks attached to it such as activists and environmentalists opposing certain methods of working that are seen as unsuitable. For example, whaling commercially was one of the projects that the company had to shut down after heavy opposition from environmentalists. In addition to that life below the surface can be affected by diseases and certain health conditions due to the operations Nippon Suisan Kaisha Ltd is involved in. It is also good to know that these risks cannot be regulated in any way.
T Hasegawa
In another report written by Joe Bauernfreund named Three Japanese stocks to buy now, he lists T Hasegawa as one of the companies for several reasons. One of them is that it is a top ten flavor and fragrance company. Hasegawa also has a low EV/ Ebitda which does not in any way demonstrate the quality of the business and therefore it has given investors a great opportunity to invest in a growing industry.
Moneyweek.com which published the article has suggested several things to the company’s board of directors; it is suggested in the article cited in the beginning of this paragraph. The firm has constructed new relations teams specifically working for greater relationships with investors overseas. Joe Bauernfreund writes that the dynamics and perspectives have become fresher within the company as a result of new employees coming in. T Hasegawa is currently being controlled by a president who is pro Western methods of working and very focused on establishing a conservative managerial culture.
Shin Etsu Polymer
In the same article, you can read about Shin Etsu Polymer, a subsidiary of Shin-Etsu Chemical that is listed on the Japanese stock exchange. Primarily business is focused on PVC rubber processing and doing the same with silicone. With strong volume for growth in its wafer division carrier cases that are used for semiconductor wafers, they were able to grow their number of sales exponentially. Their sales grew by 20% annually and 55% over the last quarter of 2022.
On an EV/EBIT ratio of only 5,7, the stock is a great chance to be able to generate good returns from a very influential and growing company. Investors should also know that another buyout from the parent company is reportedly on the horizon and therefore moneyweek.com decided to rate the company so highly.
Conclusion
In conclusion, the Japanese market offers a wide range of investment opportunities for those looking to diversify their portfolio. Tokyo Electron Ltd and Shin Etsu Polymer are two companies that are well-positioned to benefit from the growing demand for semiconductors and advanced materials, respectively. On the other hand, Nippon Suisan Kaisha Ltd offers stability to investors as a defensive investment, although it is important to be aware of the risks associated with the seafood industry. T Hasegawa is also worth considering as a growing company in the flavor and fragrance industry with a proactive approach to investor relations. As with any investment, it is important to conduct thorough research and analysis before making a decision.
