The T. Rowe Price Japan Fund (Trades, Portfolio) disclosed in its third-quarter portfolio, which was released earlier this week, that it established a position in Shimadzu Corp. (TSE:7701, Financial).
Managed by Archibald Ciganer, the Baltimore-based fund invests in Japanese stocks in order to achieve long-term capital growth. The fund focuses on finding companies that have a leading market position, experienced management teams and are capable of sustaining above-average, long-term earnings and cash flow growth.
The fund invested in 192,000 shares of the Japanese manufacturer for an average price of 3,251.38 yen ($28.96) per share, giving the holding 0.74% space in the equity portfolio.
The company, which makes precision and measuring instruments as well as medical equipment, has a market cap of 926.42 billion yen; its shares closed at 3,145 yen on Tuesday with a price-earnings ratio of 29.18, a price-book ratio of 3.46 and a price-sales ratio of 2.40.
According to the Peter Lynch chart, the stock is overpriced since it is trading higher than its fair value.
In August, the company reported financial results for the quarter ended June 30. Shimadzu posted earnings of 14.77 yen per share on 85.6 billion yen in revenue.
Supported by a comfortable level of interest coverage and a high Altman Z-Score of 6.31, GuruFocus rated Shimadzu’s financial strength 8 out of 10.
The company’s profitability and growth scored a 7 out of 10 rating as a result of good margins and returns, a moderate Piotroski F-Score of 5, which indicates operating conditions are stable, and a business predictability rank of one out of five stars. According to GuruFocus, companies with this rank typically see their stock prices gain an average of 1.1% per year.
With 1.02% of outstanding shares, the Matthews Japan Fund (Trades, Portfolio) is Shimadzu’s largest shareholder among the gurus. T. Rowe Price holds 0.07%.
Other trades
During the quarter, the fund also added to its positions in Kansai Paint Co. Ltd. (TSE:4613, Financial), UT Group Co. Ltd. (TSE:2146, Financial), Ezaki Glico Co. Ltd. (TSE:2206, Financial), Nippon Seiki Co. Ltd. (TSE:7287, Financial), Pigeon Corp. (TSE:7956), Fast Retailing Co. Ltd. (TSE:9983), Mercari Inc. (TSE:4385) and Jins Inc. (TSE:3046).
T. Rowe Price’s $818 million Japanese equity portfolio, which is composed of 80 holdings, is largely invested in the industrials and consumer cyclical sectors. According to its fact sheet, the fund posted a 32.66% return in 2017, outperforming the MSCI Japan Index’s return of 24.39%.
Disclosure: No positions.
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