In today’s briefing:
- Remain Overweight Japan, Europe, & India; Buys in Discretionary and Defensives W/ Japan/Europe Focus
- Managers Should Consider That “TSE’s Request” Has Changed the Rules of the Game
Remain Overweight Japan, Europe, & India; Buys in Discretionary and Defensives W/ Japan/Europe Focus
- We continue to recommend a tactical overweight to defensives (Staples, Health Care, and Utilities) as the MSCI ACWI (ACWI-US) tests the top-end of our anticipated 2023 trading range at $93.
- We also remain overweight Europe, Japan, and India, where a lot more than just defensives continue to outperform.
- Actionable Themes: Consumer Discretionary and Defensives, Mainly in Japan and Europe
Managers Should Consider That “TSE’s Request” Has Changed the Rules of the Game
- Examining ROE contribution requires first reducing cash and raising Asset Turnover and Financial Leverage. Also, regarding stock price appreciation, increasing ROE+DOE, which has higher correlation with TOPIX, will be effective.
- Stock performance is correlated with higher foreign ownership and Tobin’s q, indicating that overseas investors are also more interested in cash-rich, growth policy, dividend policy, policy-shareholdings, treasury-share retirements, AGM/IR disclosures.
- TSE’s adoption of P/B, made it easier to compare management capabilities with that of other companies. Managers who can’t achieve sufficient stock performance will have to seek help from shareholder-returns.
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