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Hennessy Japan Small Cap Fund's Top 5 New Stock Buys

Holly LaFon

Holly LaFon

281 followers
Hennessy Japan Small Cap Fund (Trades, Portfolio) (HJPSX) purchased six new stocks in the second quarter, bringing its total holdings to 59 in a portfolio valued at $15 million. Each of the fund’s new holdings composes more than 1% of the entire portfolio.

The Hennessy Japan Small Cap Fund (Trades, Portfolio) invests in Japan’s 15% smallest market-cap companies. In its stock selecting judgment, it incorporates in-depth analysis and on-sight research. Managers prize a sizable “value gap” and invest in their best ideas.

Managers are also optimistic about prospects for Japan, even after the Japanese market advanced 50% in yen terms in 2013. In their first quarter letter, they said, “Now with favorable top line and bottom line result, cash flow is enhanced, which can stimulate future capital expenditures and R&D spending. The trickle-down effect should benefit many domestic industries and create a positive economic cycle. We believe that corporate profits should remain strong for years to come. As a result, investors worldwide should take notice and find Japanese equities much more attractive than before.”

The top five stocks the fund purchased in the second quarter were: Dai-Ichi Seiko Co. Ltd. (TSE:6640), Tokai Tokyo Financial Holdings Inc. (TSE:8616), Hitachi Zosen Corp (TSE:7004), Eagle Industry Co. Ltd. (TSE:6486) and Studio Alice Co. Ltd. (TSE:2305).

Dai-Ichi Seiko Co. Ltd. (TSE:6640)

Hennessy Japan Small Cap Fund (Trades, Portfolio) purchased 25,000 new shares of Dai-Ichi Seiko Co. Ltd., at an average price per share of 1,430 yen. The portfolio weight for the holding is 2.1%, and the stock’s price has advanced 21.4% from the average.

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Dai-Ichi Seiko Co. Ltd. is engaged in manufacturing electronic components, automotive components, and precision components. Dai-Ichi Seiko Co. Ltd. has a market cap of 29.03 billion; its shares were traded at around 1,736.00 with and P/S ratio of 0.68. The dividend yield of Dai-Ichi Seiko Co. Ltd. stocks is 0.46%.

Tokai Tokyo Financial Holdings Inc. (TSE:8616)

Hennessy purchased 38,000 Tokai Tokyo Financial shares, which traded for 747 yen per share in the first quarter. Tokai Tokyo has a 1.7% portfolio weight, and its share price has climbed 5% from the average.

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Tokai Tokyo Financial Holdings Inc. has a market cap of 204.96 billion; its shares were traded at around 788.00. The dividend yield of Tokai Tokyo Financial Holdings Inc. stocks is 1.44%.

Hitachi Zosen Corp (TSE:7004)

Hennessy purchased 49,500 shares of Hitachi Zosen, whose stock price averaged 496 yen per share for the quarter. The holding consumes 1.6% of the portfolio, and its share price has increased 5% from the average.

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Hitachi Zosen Corp is engaged in the business of environmental systems, industrial plants, industrial machinery, process equipment, precision machinery, steel structure, construction machinery, disaster prevention systems. Hitachi Zosen Corp has a market cap of 15.87 billion; its shares were traded at around 521.00 with a P/E ratio of 243.10. The dividend yield of Hitachi Zosen Corp stocks is 1.55%.

Eagle Industry Co. Ltd. (TSE:6486)

Hennessy bought 15,000 shares of Eagle Industry Co., whose stock averaged 1,175 yen per share for the quarter. The holding is 1.6% of the portfolio, and the stock price has climbed 5% from the average.

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Eagle Industry Co. Ltd. is engaged in the manufacturing and sales of mechanical seals, valves, plant devices, marine products, bellows devices and related installation work. Eagle Industry Co. Ltd. has a market cap of 85.91 billion; its shares were traded at around 1,808.00 with a P/E ratio of 11.60 and P/S ratio of 0.69. The dividend yield of Eagle Industry Co. Ltd. stocks is 0.93%. Eagle Industry Co. Ltd. had an annual average earnings growth of 12.80% over the past five years.

Studio Alice Co. Ltd. (TSE:2305)

Hennessy purchased 11,400 shares of Studio Alice, whose stock averaged 1,440 per share in the second quarter. The holding is 1.1% of the portfolio, and the price is up 2.5% from the average.

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Studio Alice Co. Ltd. is engaged in operating a photography studio specializing in children. Studio Alice Co. Ltd. has a market cap of 24.89 billion; its shares were traded at around 1,477.00 with a P/E ratio of 24.30 and P/S ratio of 0.69. The dividend yield of Studio Alice Co. Ltd. stocks is 2.47%.


For more stocks of the Hennessy Japan Small Cap Fund (Trades, Portfolio), visit its portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


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