The T. Rowe Price Japan Fund (Trades, Portfolio), which invests in common stocks primarily in Japan, found two stocks in the second quarter that met its criteria for purchase, it reported this week.
Led by Archibald Ciganer, the investment firm’s Japan strategy seeks companies that promise strong growth, which can often be more volatile that value stocks. It also concentrates its portfolio in companies based in Japan, whose economy is highly susceptible to the effects of trade tariffs and the financial state of its principal trading partner countries.
The portfolio at second quarter-end held 79 positions, with a value of $715 million. The largest represented sectors were industrials at 26.82% of holdings, technology at 16.4% and consumer cyclical at 15.25%. As its largest positions, the fund held SoftBank Group Corp. (TSE:9984, Financial) at 4.67%, Miura Co. Ltd. (TSE:6005, Financial) at 3.84% and Nippon Telegraph & Telephone Corp. (TSE:9432, Financial) at 3.54%.
In its semi-annual report for the period ended April 30, the T. Rowe Price Japan Fund (Trades, Portfolio) was avoiding banks entirely due to low interest rates subduing margins and loans growing modestly.
“We believe that the valuation case for Japan still holds and that corporate earnings are likely to grow faster in Japan than in the rest of the world,” fund managers wrote at the time.
In the second quarter, the T. Rowe Price Japan Fund (Trades, Portfolio) purchased shares of Hamamatsu Photonics KK (TSE:6965, Financial) and Sansan Inc. (TSE:4443, Financial). It exited a position in Japan Tobacco Inc. (TSE:2914).
Hamamatsu Photonics KK (TSE:6965, Financial)
T. Rowe Price Japan Fund (Trades, Portfolio) purchased 151,200 shares of Hamamatsu Photonics KK, giving it 0.83% portfolio weight. The stock’s second-quarter share price averaged 4,200 yen per share.
Hamamatsu Photonics KK has a market cap of 630.8 billion yen; its shares were traded around 3,930.00 yen Thursday with a price-earnings ratio of 29.63 and price-sales ratio of 4.33. The trailing 12-month dividend yield of Hamamatsu Photonics KK is 0.98%. The forward dividend yield of Hamamatsu Photonics KK is 0.98%. Hamamatsu Photonics KK had an annual average earnings growth of 6% over the past 10 years.
Sansan Inc. (TSE:4443, Financial)
T. Rowe Price Japan Fund (Trades, Portfolio) purchased 28,500 shares of Sansan Inc., giving it 0.21% portfolio weight. The stock’s second-quarter share price averaged 5,481 yen.
Sansan Inc. has a market cap of 175.4 billion yen; its shares were traded around 5820.00 yen Thursday.
Shimano Inc. (TSE:7309)
T. Rowe Price Japan Fund (Trades, Portfolio) increased its Shimano Inc. position by 26.32%, buying 16,900 shares, which brought its total to 81,100 shares. The stock’s second-quarter share price averaged 16,855 yen.
Shimano Inc. has a market cap of 1.44 trillion; its shares were traded around 1,5050.00 yen with a price-earnings ratio of 26.46 and price-sales ratio of 4.01. The trailing 12-month dividend yield of Shimano Inc. stocks is 0.54%. The forward dividend yield of Shimano Inc. is 1%. Shimano Inc. had an annual average earnings growth of 12.40% over the past 10 years. GuruFocus rated Shimano Inc the business predictability rank of 3.5-star.
Murata Manufacturing (TSE:6981)
The fund purchased 174,900 shares, increasing the position by 16.6% to 174,900 shares. It represented 1.11% of the portfolio. The stock’s second-quarter share price averaged 5,182 yen.
Murata Manufacturing Co Ltd has a market cap of 2.95 trillion yen; its shares were traded around 4,542.00 yen with a price-earnings ratio of 14.27 and price-sales ratio of 1.87. The trailing 12-month dividend yield of Murata Manufacturing Co. Ltd. is 4.04%. The forward dividend yield of Murata Manufacturing Co. Ltd. is 2.04%. Murata Manufacturing Co. Ltd. had annual average earnings growth of 8.4% over the past 10 years.
See the T. Rowe Price Japan Fund (Trades, Portfolio)’s portfolio here.
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