Japanese Stocks: A Treasure Trove

投稿日: 投稿者: タダシ

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Japanese Stocks: A Treasure Trove

 

There are 516 stocks within the TOPIX index trading below a Price-to-Book Ratio (PBR) of 1.0x. Driven by the Tokyo Stock Exchange’s corporate governance reforms, the number of such stocks is on a downward trend. Even among blue-chip companies—ranked by market capitalization—names such as Toyota, Honda, Japan Post Holdings, Denso, INPEX, JR Central, Nippon Steel, ENEOS, Kansai Electric Power (KEPCO), Daiwa House, and NYK Line are trading below a PBR of 1.0x.

・The NT Ratio narrowed to 15.84x (down from 16.04x the previous week).

The number of TOPIX stocks trading below a PBR of 1.0x is declining; while the figure stood at 516 at the end of this week, it had dropped to 491 as of September 1.

Among the 33 TOPIX industry sectors, the Electric Power & Gas index posted the highest gain at 5.01% (compared to a 1.05% decline for the TOPIX overall). This was followed by the Oil & Coal Products index at 2.78% and the Banking index at 2.44%. Since these sectors contain many stocks trading below a PBR of 1.0x, these gains indicate that capital is flowing into such undervalued stocks.

 

・Electric Power Stocks Trading Below PBR 1.0x

Among electric power stocks this week, Kansai Electric Power (KEPCO) saw the highest gain (week-over-week) at 12.80%, followed by Kyushu Electric Power at 9.68% and Shikoku Electric Power at 7.92%.

Despite these share price increases, not a single electric power stock has yet exceeded a PBR of 1.0x. The highest ratio belongs to Kyushu Electric Power at 0.979x, while the lowest is Tokyo Electric Power (TEPCO) at 0.37x. Which stock will be the first to cross the 1.0x threshold?

Will it be Kansai Electric, Kyushu Electric, or the surging Shikoku Electric?・Bank Stocks Trading Below 1x PBR

Among bank stocks, Shikoku Bank (up 4.43% week-over-week) and Miyazaki Bank (up 4.21%) significantly outperformed the sector index, which rose 2.44%.

While major banks (megabanks) already trade above a PBR of 1.0, regional banks trading above this level remain the minority. Within the TOPIX index, Shimizu Bank holds the lowest PBR at 0.45x.

The stocks bought this week—Shikoku Bank and Miyazaki Bank—trade at 0.79x and 0.95x PBR, respectively.

 

 

・Steel Stocks Trading Below 1x PBR

The steel sector index rose 0.81% week-over-week. Notable gainers included Nakayama Steel Works (+3.73%), Nippon Steel (+2.32%), and Yamato Kogyo (+1.31%). Many steel-related stocks trade below a PBR of 1.0; Nippon Steel is at 0.64x, JFE at 0.44x, and Kobe Steel at 0.63x. In contrast, major US steelmaker Nucor trades at 2.86x PBR. Nippon Steel has acquired US Steel; this move offers the potential for a stock price re-rating alongside expanded market share in the US. Although the share price is currently suppressed by hedging sales—driven by rising “delta” values ​​as the price approaches the conversion price of issued convertible bonds—a catalyst could trigger a sharp rally and accelerate conversions. I believe now is a good time to buy while prices are low.

 

 

 

 

・Shipping Stocks Next Week

The Baltic Dry Index rose 9.48%, surpassing its highs seen since 2023. Among major shipping companies, Kawasaki Kisen Kaisha trades above a PBR of 1.0 (at 1.15x), whereas Nippon Yusen (NYK Line) is at 0.92x and Mitsui O.S.K. Lines is at 0.80x.

We may see a market-wide lift for shipping stocks next week.・Caterpillar-Komatsu Ratio: Dropped to 8.37x

While Caterpillar shares are being sold off, Komatsu shares are performing solidly. The ratio, which once exceeded 12x, has fallen to 8.37x. Komatsu stock remains undervalued; it is likely to hit an all-time high next week.

 

・US Market

In the US market, investment-grade bond ETFs have hit new lows for the year. Capital appears to be flowing out of investment-grade bonds and into medium-term government bonds. Meanwhile, junk bonds are holding firm.

Among stock indices, semiconductor-related stocks are performing well, though overall stock valuations appear high.

 

・India

Rising crude oil prices and currency depreciation are evident. Foreign investors have shifted to a net selling position since June.

On the other hand, the IPO market is booming. The listing date for India’s largest stock exchange, the National Stock Exchange (NSE), has been set for the week of the 21st. It will be the largest listing in Indian history, and I expect it to be included in the SENSEX and Nifty 50 indices.

 

Data: Bloomberg

Certified International Investment Analyst (CIIA)

Certified Securities Analysts Association (CMA)

AFP

Tadashi Fujii

投稿者プロフィール

タダシ
大学時代から株式投資をはじめ、証券会社のトレーダーとなる。以後、30年
金融畑一筋。専門分野は債券、クレジット。
日本証券アナリスト協会検定会員（CMA）、国際公認投資アナリスト（CIIA)

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