Japan – state of the market (Oct 14, 2020) – Part 1

I have been studying the Japanese equities market over the last few months and have identified sectors that are exhibiting a positive trend. These sectors warrant a closer look as we could find potential outperformers/multi-baggers.

The broad sectors that I see gaining a lot of investor attention over the course of the last 3 months are:
– Agricultural & Farm Machinery
– Air Freight & Logistics
– Automotive Retail
– Footwear
– Healthcare Services
– Homebuilding
– HR
– Internet + Direct Marketing
– Movies and Entertainment
– Multi-line insurance
– Specialty stores
– Thrifts & Mortgage Finance

Looking at these sectors, one can notice that some of these have been strong since Covid hit in early 2020. But quite noticeable are the sectors which indicate re-opening and economic growth. I will explore some of these below and put together a list of good looking stocks in each sector.

I invite you to do the fundamental analysis and help me choose companies with the best prospects:

Agricultural & Farm machinery:

Kubota Corp (6326.T): consolidating since a big run up just before end-Aug.

Yamabiko (6250.T): Notice that this particular company went on racing upwards even though September was a tough month for most equities.

Air Freight and Logistics: It is a global phenomenon that this sector is getting bid up. Logistics is definitely getting a lot of attention (similar to FedEx in US):

SG Holdings (9143.T): looks a bit stretched right now, keeping an eye on this one when levels become interesting.

Maruwa Unyu Kikan (9090.T): I like the technicals on this one, big volume up days vs low volume down days.

Automotive Retail:

Nextage (3186.T): Something seemingly awesome is happening here, big volume buying, making multi year highs. 3x since April 2020! Is that a bit too much for a business that “provides a range of services in the used car business, including sales of car supplies, insurance contracts, vehicle safety inspection, vehicle repairs after accident, and vehicle purchasing”?

Fuji Corp Miyagi (7605.T): pulling back a bit but still looks bullish. A lot of institutions won’t touch this one given it trades only $400k-$500k a day.

Healthcare Services

Elan Corp (6099.T): Very strong price action, long term uptrend. Business: provides services for rental with laundry service of clothes, towels, etc. combined with supply of daily necessities to persons admitted to hospitals and elderly facilities.

Charm Care (6062.T): another company that helps nursing care business. Although technically I feel it requires some consolidation for a better entry.

Alright, that’s 8 companies across 4 different sectors. Will cover the rest in Part 2!

Hope it’s helpful.

Charts sourced from investing.com

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: This is not investment advice, please do your research before committing capital.

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