The Matthews Japan Fund (Trades, Portfolio), which invests in Japanese companies in order to achieve long-term capital appreciation, gained two new holdings and increased several others during the second quarter.
Managed by Kenichi Amaki and Taizo Ishida, the fund’s portfolio is composed of 57 stocks. The fund managers’ two new purchases for the quarter are Persol Holdings Co. Ltd. (TSE:2181, Financial) and Recruit Holdings Co. Ltd. (TSE:6098, Financial).
In its largest buy for the quarter, the Japan Fund purchased 2.7 million shares of Persol Holdings for an average price of 2,148.09 yen ($19.48) per share, giving it 1.57% portfolio space.
The employment services company has a market cap of 484.51 billion yen; its shares were trading around 2,090 yen on Monday with a price-earnings (P/E) ratio of 27.35, a price-book (P/B) ratio of 3.48 and a price-sales (P/S) ratio of 0.85.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked Persol’s financial strength 8 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 0.82% and its forward dividend yield is 0.87%. Over the past five years, the company has grown its dividend at a rate of 29.6% per year.
With its purchase, the Japan Fund became the company’s largest guru shareholder with 1.19% of outstanding shares. The T. Rowe Price Japan Fund (Trades, Portfolio) also owns the stock.
Having previously sold out of Recruit Holdings in fourth-quarter 2015, the fund established a 3 million-share stake for an average price of 1,950.32 yen per share, giving it a portfolio weight of 1.56%.
The employment services company has a market cap of 3.21 trillion yen; its shares were trading around 1,909 yen on Monday with a P/E ratio of 37.9, a P/B ratio of 4.16 and a P/S ratio of 1.86.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Recruit Holdings’ financial strength 8 of 10 and its profitability and growth 5 of 10. The company’s trailing dividend yield is 1.13% and the forward dividend yield is 3.69%.
With its purchase, the fund became Recruit’s largest shareholder among the gurus with 0.18% of outstanding shares. The Hennessy Japan Fund (Trades, Portfolio) and T. Rowe Price Japan Fund also hold the stock.
The fund managers also added to many other holdings during the quarter, including Murata Manufacturing Co. Ltd. (TSE:6981, Financial), PeptiDream Inc. (TSE:4587, Financial), Japan Tobacco Inc. (TSE:2914, Financial) and Oracle Corp. Japan (TSE:4716). Among the reductions were Kyoritsu Maintenance Co. Inc. (TSE:9616), Koa Corp. (TSE:4452), Tokio Marine Holdings Inc. (TSE:8766) and Mitsui Fudosan Co. Ltd. (TSE:8801). The managers did not exit any positions during the quarter.
Disclosure: I do not own any stocks mentioned.
