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Warren Buffett's Berkshire Plunges Into 5 Japanese Conglomerates

Investing titan seeks value opportunities in Asia

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Aug 31, 2020
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Berkshire Hathaway Inc. (

BRK.A, Financial)(BRK.B, Financial), the insurance conglomerate headed by Warren Buffett (Trades, Portfolio), announced on Monday that it acquired approximately a 5% stake in five major Japanese trading stocks: Itochu Corp. (TSE:8001, Financial), Marubeni Corp. (TSE:8002, Financial), Mitsubishi Corp. (TSE:8058, Financial), Mitsui & Co. Ltd. (TSE:8031, Financial) and Sumitomo Corp. (TSE:8053).

Berkshire said in a news release that the Omaha, Nebraska-based conglomerate made the purchases over a period of approximately 12 months through regular purchases on the Tokyo Stock Exchange. Buffett, who celebrated his 90th birthday over the weekend, said that he is "delighted" to have the conglomerate "participate in the future of Japan" and engage in further opportunities of mutual benefit.



Itochu's businesses import, export and trade various products, which include textiles, machinery, metals, minerals, energy, chemicals, food and technology. GuruFocus ranks Itochu's profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and a return on assets that outperforms 82.15% of global competitors.



Marubeni focuses on trading and business investments in grain fields, natural resource and energy fields and power generation fields. GuruFocus ranks the company's financial strength 4 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 1.43 and a debt-to-equity ratio that underperforms over 79% of global competitors.



Mitsubishi offers products and services in a wide range of market sectors, including business services, global environment and infrastructure, industrial finance, logistics and development, energy, metals, machinery and chemicals. GuruFocus ranks the company's profitability 7 out of 10 on the back of returns outperforming over 68% of global competitors and a three-year revenue growth rate that outperforms 91.54% of global conglomerates. Despite this, operating margins have increased over the past five years, albeit underperforming 64% of global peers.



Mitsui engages in a wide range of business activities in metals, machinery, infrastructure, chemicals, energy, lifestyle, innovation and corporate development. GuruFocus ranks the company's profitability 6 out of 10: Although returns are outperforming over 75% of global competitors, Mitsui's operating margin has declined over the past five years and is outperforming just 57.97% of global energy companies.



Sumitomo operates in various business areas, ranging from transportation and infrastructure projects to mineral and lifestyle products. GuruFocus ranks the company's financial strength 4 out of 10 on the back of low Altman Z-scores and debt ratios underperforming over 78% of global competitors.


Disclosure: The author has no positions in the stocks mentioned. Information about these trades are sourced from Berkshire's news releases. The Securities and Exchange Commission's Form 13-F primarily includes just U.S.-based companies per regulations.

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