It can pay to pay attention to what investment legends are doing to cope in these turbulent times. Warren Buffett still has a knack for seeking value and a history of going to Japan to find it in times of volatility. Meanwhile, my recommendation of Denmark’s Novo Nordisk (NVO), used to treat obesity, is working well, notes Carl Delfeld, editor of Cabot Explorer.
Overall, Japan’s Topix index trades at 13.3 times expected earnings, according to S&P Global Market Intelligence. That compares with 18.9 times for the S&P 500.
Since at least 2020, his Berkshire Hathaway has been building ownership positions as high as 6% in some of Japan’s storied trading companies. The five largest trading companies – known as “sogo shosha” – are giant conglomerates that import and export everything from energy to food to electronics. They also invest in all sorts of sectors from mining to retail.
The leading trading companies are Itochu, Marubeni, Mitsui, Mitsubishi, and Sumitomo. Some of these conglomerates are well over 100 years old and, on average, they currently trade around their book value and at six times their earnings.
Nikkei also reported that Berkshire Hathaway may issue another yen-denominated bond, signaling that it may increase its investments in Japan. I also plan on researching and adding some Japanese stocks to the Explorer portfolio in the coming months.
As for NVO, its shares recently added five points after inking a nearly $2.7 billion deal with privately held Aspect Biosystems that boosts its efforts in diabetes and obesity treatment. Its popular drug Ozempic is approved for type 2 diabetes, but people have been taking the drug for losing weight because of its effectiveness.
Novo Nordisk (NVO)
Reportedly patients are successfully shedding 30 pounds or more in a relatively short period of time. According to the Centers for Disease Control and Prevention (CDC), 42% of American adults – and 1 in 6 American children – are significantly overweight.
Obesity shortens lives. It is linked to more than 60 chronic diseases. Keep in mind, the percentage of American adults who are obese has nearly doubled over the last 60 years, increasing from 22% to 42%.
Recommended Action: Buy NVO.