Japan’s near-term economic forecast is gloomy, but the world’s second-largest economy still might offer some bright investment opportunities.
The largest holding in the SPARX Japan Fund (SPXJX) is Fuji Seal International (TYO [Tokyo Stock Exchange]: 7864; Price: $14.54). This company makes packaging for large, international companies, including Nestlé and Procter & Gamble. “We like this name because of its strong balance sheet, quality manufacturing and growing sales in emerging markets,” Masakazu Takeda, co-portfolio manager, tells Consumers Digest. He says the fund also is keen on Kao (TYO: 4452; Price: $22.40), which makes cosmetics and home-care products. He believes that Kao should benefit from any future increase in consumer goods purchases in Asia and emerging markets. And he likes Keyence (TYO: 6861; Price: $198.40), a manufacturer of sensors for factory automation, for its strong balance sheet, strong future earnings prospects and current valuation.