Japan Emerges As Promising 2024 Investment Destination: 3 Stocks To Consider

UBS AG is increasing its focus on Japan by reinstating its equity strategist role for the country after a seven-year break. This decision reflects UBS’ anticipation of heightened client interest in the Japanese stock market. JP Morgan also recognizes the potential for a positive reassessment in Japanese equities.

The iShares MSCI Japan Index Fund EWJ offers a diversified way to get exposure to Japanese equity.

Also Read: S&P 500 Likely To ‘Test The 5,000 Level’: JP Morgan On Where To Allocate In 2024

BlackRock looks upon Japan as a key beneficiary of global fragmentation. Their chart above shows the outperformance this year of companies that sit at the low end of price-to-book ratios. BlackRock sees this as a reflection of investors getting in front of more value-enhancing measures coming at such firms.

“We still see overall valuations as attractive”, says Belinda Boa,CIO of Emerging Markets Fundamental Equity at BlackRock.

In light of BlackRock’s belief that companies with low price-to-book (P/B) ratios, which have already outperformed others, might further enhance shareholder value, we conducted a more detailed analysis to identify stocks exhibiting these traits.

We chose Japanese companies that have American Depositary Receipts (ADRs) trading in the U.S. market. For this comparison, we selected three companies with the lowest price-to-book (P/B) ratios and three with the highest.

Below are the companies with the lowest P/B ratios:

Nissan Motor Co Ltd NSANY is an industrial corporation that manufactures automobiles, trucks, and buses under the names Nissan and Datsun. The stock has returned 19.94% to investors over the past year and trades at a P/B of just 0.39.

Honda Motor Co Ltd HMC has its beginnings in the motorcycle business. Honda is well known globally for its diverse range of mobility products, including automobiles, power products and aircraft. The stock has returned 28.52% over the past year and trades at a P/B of 0.59.

Nomura Holdings Inc NMR, through its companies, conducts investment and financial services business with an emphasis on securities businesses. The stock is up 24.43% over the past year and trades at a P/B of 0.60.

Now, for the ones with the highest P/B ratios:

Capcom Co Ltd CCOEY is the creator of a number of multi-million-selling game franchises. The stock has only gained 4.66% over the past year and trades at an expensive P/B ratio of 5.46.

Daiichi Sankyo Co Ltd DSNKY is a global pharmaceutical company; the second-largest pharmaceutical company in Japan. Daiichi’s stock trades at a P/B of 5.04 and is down 15.64% over the past year.

Sony Group Corp SONY is one of the leading producers of audio and video electronics. The company’s stock is up 17.93% over the past year. However, it trades at an expensive valuation of 2.37 P/B.

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Photo: Unsplash