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

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.

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.

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.

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.

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。

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.