In today’s briefing:
- Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA
Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA
- If we read “improved asset efficiency” as “ROA,” it would fit better. ROA, along with ROE, correlates with valuation, and higher ROA can be expected to trigger higher stock prices.
- Companies with high ROA tend to have advanced corporate governance initiatives. In Metrical Universe of 1,779 companies, ROA (historical 3-year average) for many of corporate governance metrics are significantly correlated.
- Whether Japanese stocks are undervalued is another question, but if companies have resources but are neglecting company-wide efforts to increase margins and turnover, activist investors are likely to be interested.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
