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Deep Value Stocks- Japans Real Investment Story
Global institutional investors are becoming increasingly interested in the legions of undercovered and ignored mid-cap and small-cap stocks in Japan. Thus the pool of restructuring", buyout" and revitalization" funds looking to invest in undervalued Japanese stocks continues to grow.
(PRWEB) December 20, 2004 -- There is a growing consensus that Japan's economic growth will slow in 2005, and along with it, corporate profits. However, US stocks are still widely considered the least attractive equity market in terms of valuations, while the dollar is the least attractive currency.
Thats good for both Japanese stocks and the yen. The yen was already appreciating before the election outcome, on a growing view that pressures for a weaker dollar would continue to mount irregardless of who won the presidency.
Some strategists are beginning to suggest that foreigners already have the exposure to Japan they need, while the US dollar could stage a comeback in 2005.
However, the real investment story in Japan is deep value smaller capital stocks. While individual investor fervor for stock trading has waned, institutional investors are becoming increasingly interested in the legions of undercovered and ignored mid-cap and small-cap stocks in Japan, as the pool of restructuring", buyout" and revitalization" investment funds continues to grow, while the Japanese government continues to lower barriers to more active M&A activity.
In addition, while the Dogs of the Nikkei" already has a good historical track record, this renewed interest in deep discount stocks can only boost those companies with high dividend payouts and dividend yields in boring" industries or with temporary problems that have not seriously hurt their profitability.
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