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Buffett is paying attention to investing in Japanese stocks! The stocks of the five major trading companies have had the highest rate of increase of over 140% since the beginning of '23

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moomooニュース日本株 wrote a column · Apr 11 18:25
Buffett is paying attention to investing in Japanese stocks! The stocks of the five major trading companies have had the highest rate of increase of over 140% s...
We've prepared a few recommended articles to get started with investing.
In this article, I would like to introduce the “five major trading companies” loved by Mr. Buffett. Let's consider the merits of investing in individual stocks from the “oversized theme” of Mr. Buffett's investment trends. For more information on other investment themes, please check here!
The 3 stocks I would also like to consider investing in under the new NISA framework are attractive for their outstanding stability and dividend yields of over 3%
Let's find stocks from shareholder benefits!
As the Nikkei Average hits the highest value after the bubble, what is attracting particular attention“Five major trading companies” loved by Mr. Buffettthat's it. The five major trading companies have all shown increases in stock prices over the past 1 year, but when comparing the rate of increase of each trading company,Mitsubishi Corp. saw a 146% increase in performance that went beyond its headI'm doing it. Mitsui & Co., Ltd. recorded increases of 88%, Marubeni 73%, Sumitomo Corporation of 69%, and ITOCHU Corporation of 62%, which is well above the Nikkei Average. Mr. Buffett, a famous American investor, began investing in Japanese trading company stocks in 2019, and announced in 2020/8 that he holds 5% or more of each company's shares. Purchases continued thereafter, and according to the 2024/2 “Letter to Shareholders” (hereinafter: Shareholder Letter), Berkshire's trading company stock holdings are about 9%, and they are about to reach 9.9%, which he clearly states as the upper limit.
What is noteworthy is that in his shareholder letter, Mr. Buffett said that investments in these trading company stocks were for 10 to 20 yearsLong term holdingIt has been clarified that they are aiming for it. Also, Berkshire led by Mr. BuffettThey are also actively issuing bonds in the yen bond market. Recently, it became known on the 9th that the Bank of Japan is planning to issue the first corporate bond denominated in yen after the policy change. In response to this, with the funds raised by Mr. Buffett, “aren't they going to buy trading company stocks?” Speculation is spreading.
Buffett is paying attention to investing in Japanese stocks! The stocks of the five major trading companies have had the highest rate of increase of over 140% s...
What is the appeal of Japan's “Big 5 Trading Companies” loved by Buffett?
・A business model that handles a wide range of products, and the range of interests is far larger than Berkshire
As a reason for investing in the five major trading companies, Mr. BuffettA business model similar to BerkshireThey are listed. The five major trading companies are widely distributed in business fields, and while Berkshire itself is involved in businesses such as insurance and railways, it is a major beverage company $KO.US$and IT giants $AAPL.US$It is also known for investing in,diversificationIt is running the operation that was done.
Trading companies are due to the breadth and flexibility of their businessIt has strong durabilitySince it has the vitality to actively respond to business opportunities,There is still a possibility that it will develop in the futureThere is. Also, the scope of interests of trading companies is much larger than Berkshire, and Berkshire is the five largest trading companies due to investmentWe can collaborate in various businesses around the worldBeing able to create possibilities was also listed as one of the advantages.
・Proactive shareholder returns
Mr. Buffett wrote that 5 companies compared to the conventional response in the USMore shareholder-friendly policiesIt is rated as having taken it. Of the 5 companiesShareholder return policyIt is also “favorable to shareholders,”Company stock buybacksIt is also pointed out that efforts are being made to increase the value of stocks held by investors as a result.They are also reluctant to issue new sharesIt avoids stock dilution due to the issuance of new shares.
・Profit distribution is mainly used for dividends, business investments, and share buybacks
Mr. Buffett wrote in a letterDistribution of profitsFive general trading companies, ITOCHU Corporation, Mitsui & Co., Mitsubishi Corporation, Sumitomo Corporation, and Marubeni CorporationTurn about one-third of net profit into dividendsThe majority of internal reservesbusiness investmentYes, although the scale is smaller than thatCompany stock buybacksIt was pointed out that it is used in. Regarding executive remuneration of Japanese trading companies, compared to typical executive remuneration amounts in the US”far more modestIt is,” he praised.
・Expectations for commodity price increases
If you look at the financial results of the five major trading companies,The majority of earningsIt can be seen that they are brought from upstream resource commodity sectors such as minerals and energy. Buffett's investments are a field in which trading companies are extensively involvedExpectations for higher energy and commodity pricesThere is a possibility that it is reflected. The investments made by Buffett when oil and gas prices fell due to COVID-19 were also driven by the Russia-Ukraine conflict and economic recovery,It brought about huge profits due to soaring commodity prices。
How will stock prices move towards the fiscal season? Will the “Buffett Effect” tailwind continue this year?
Narita Yasuhiro, an analyst at Nomura Securities, is preparing to announce financial results for the fiscal year ending 2024/3 as profit growth attitudes and shareholder returns continue to expand due to new investments by trading companiesAdditional shareholder returns are expectedIt was done,Supporting trading company stocksIt points out. Also, Director Otani Masayuki of the Securities Japan Research and Information Department said that Berkshire was bought on the premise of long-term ownership, and then aimed at improving shareholder valueEfforts on the corporate side will continue in the futureThat's why it's a trading company stock because it's thoughtThere is no sense of costIt was decided that there is still room for increased attention and expectations in preparation for the announcement of full-year financial results. Since it is thought that the minimum dividend level will be maintained regardless of performance fluctuations, there is also a possibility that it will give investors a sense of security when buying. However, the evaluation from Mr. Buffett, who believes in long-term holding, can be regarded as an international “endorsement” of the stability of the five companies, but due to fluctuations in exchange rates, resource prices, etc., it seems that stocks of the five major trading companies will not be spared from the risk of price movements in the future.
Buffett is paying attention to investing in Japanese stocks! The stocks of the five major trading companies have had the highest rate of increase of over 140% s...
What are the characteristics of each investment you would like to refer to?
$Mitsubishi.JP$is a “general trading company” representing Japan. It is the core company of the Mitsubishi Group, and while it has a strong business base of resources, machinery, and chemicals, it is also developing consumer businesses through convenience stores such as “Lawson.” Mitsubishi Corporation announced a 500 billion yen share buyback in February. Large-scale returns leading to a total return ratio of over 90% for the fiscal year ended 24/3 gave a surprise to the market, and stock prices also skyrocketed. Jeffries Securities analyst Pham Taeinha and his colleagues said in the report,”Monster-class stock buybacksIt was evaluated that the impact of” was greater than expected. It is said that Mitsubishi Corporation has an additional surplus capital of 500 billion yen, and “if an attractive acquisition target cannot be foundShareholder returnsIt will be used for,” he pointed out.
$Mitsui.JP$It is positioned as a duality with Mitsubishi Corporation. relatively,Strong inclination towards resource-related businesses. It focuses on commodities such as iron ore and liquefied natural gas,Demonstrating strength in the resources and energy sectorI'm doing it. In particular, they place strong emphasis on iron ore, and are investing heavily in Australia, which is rich in resources. Also, Mitsui & Co., goes beyond these traditional fields to include healthcare, etc.Expansion outside of the resource sectorThey are also steering the wheel.
$ITOCHU.JP$Unlike other trading companies,The weight of resource-related businesses is relatively lowInstead, “FamilyMart,” which became a wholly owned subsidiary, etc.The proportion related to household consumption is highIt is a characteristic. Also, among major trading companiesRisk money invested and loaned in China is the largestIt can be said that the strength of pipes related to China is also characteristic. Also, the company made it clear that shareholder returns would be strengthened early in the new fiscal year. The management plan for the fiscal year ending 2025/3 was announced on 4/3. Dividends plus the total amount of stock buybacks divided by net profitPolicy to increase total return ratio to around 50%I showed it. Since the total return ratio for the current fiscal year is 41% of the forecast for the previous fiscal year, an increase of about 10% is expected in the future. The lower limit of the annual dividend per share was set to 200 yen, 40 yen more than the previous fiscal year, and a stock repurchase of 150 billion yen, which is the largest ever, was also announced.Management that continuously returns stable profits to shareholdershas been evaluated by the market.
$Sumitomo.JP$It is famous in the fields of real estate, media, leasing, and steel products, but it is focusing on non-ferrous metals in the resources industry. Sumitomo CorporationExpand your business globallyThus, sales in Japan account for approximately 40% of the total. The United States is also one of the major markets, accounting for more than 15%, and Asian countries also account for close to 20%. Other regions, such as Europe and the Middle East, account for just over 15%, and the rest is Latin America. Sumitomo Corporation is responsible for this kind of distributionIt has established a firm position internationallyIt shows.
$Marubeni.JP$What is the resource investment ofdecentralizingIt has been done, avoids excessive dependence on specific products, and compared to other companies, exposure to resources is relatively balanced. In recent years, the risk of asset impairment has been reduced through aggressive measures. The company's strategic focus areas include North American agricultural products (especially beef and grain) and aerospace leasing.
Source: moomoo, Nihon Keizai Shimbun, Bloomberg
ー MooMoo News Sherry
Buffett is paying attention to investing in Japanese stocks! The stocks of the five major trading companies have had the highest rate of increase of over 140% s...
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