Some of Japan's best companies are now selling at bargain prices

04/07/2011 4:11 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

An aftershock measuring 7.4 hit already devastated northeast Japan today.

It’s likely though that a decision by the Bank of Japan not to significantly expand its own program of quantitative easing weighed more heavily on stocks. The Nikkei 225, which had been up as much as 1.1% during today’s session, closed up less than 0.1% for today, April 7. The index is now down 8% from its pre-earthquake and pre-tsunami close on March 10.

Investors were hoping that the Bank of Japan would add to its monetary stimulus program to help speed the country’s recovery from the earthquake/tsunami disaster. But other than announcing a new $12 billion program of one-year loans, the central bank has decided to maintain the status quo. The bank will not increase the size of its $120 billion asset-buying fund or of a $360 billion credit program. The bank also announced today that it would hold its benchmark interest rate steady. But with the rate already set at 0% to 0.1% nobody was expecting any action on this front.

I know the road back from this disaster is likely to be long and difficult but shares of some of Japan’s world-class exporting companies are selling at bargain prices even against that backdrop. Some names to look at include robotics and automation leader Fanuc (FANUY), Canon (CAJ), carbon-fiber producer Toray Industries (TRYIY) and construction-equipment maker Komatsu (KMTUY). I’ve given you the symbols for the U.S.-traded ADRs, but I’d recommend buying the Tokyo-traded shares if you can because these stocks trade with much higher volumes in their home market.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did own shares of Canon, Komatsu, and Toray Industries as of the end of January. For a full list of the stocks in the fund as of the end of January see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

 

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