In today’s briefing:
- Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
- EPS and BPS had run in parallel since June 2022, but BPS has accelerated at a more rapid pace since May 2023, and TOPIX has risen sharply since April 2023.
- Since TOPIX is more correlated with BPS than EPS, the hypothesis that “stock prices are more reliant on BPS increases, including cash increases, than on EPS” would be considered.
- Investors may believe that Japanese management still needs more time to use cash effectively, and evaluate companies based on their BPS, which indicates a movement toward improved cash flow.
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