Please ensure Javascript is enabled for purposes of website accessibility

5-Star Japanese Stocks to Consider for Your Portfolio

By Kapit all – Updated Apr 6, 2017 at 9:34AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The weakened Nikkei might present some interesting investing opportunities.

Once upon a time, Japan was the world's second largest economic superpower. Back in the 1980s, Japan was a global contender, with the strongest economy in the Far East -- and possibly even a threat to U.S. dominance.

Fast-forward to 2010, where the Nikkei is the single worst performing index of the world's 40 largest markets. The current weakness of its economy is matched by the strength of the yen -- and with so much of the country's business taking place overseas, it's wreaking havoc on a number of Japanese stocks.

Here's why: Right now, a company with most of its business abroad is making its sales in weak dollars, but has to pay its operating costs with the yen, which means smaller profit margins. And with the wobbly Nikkei chained to the performance of the yen, even the companies that managed to post profits have had weak stock showings -- last week, shares of both Sony and Honda hit the skids in spite of solid profits.

On the bright side, the Nikkei's weakened state may also present some interesting investing opportunities.

According to Dr. Steve Sjuggerud, editor of Daily Wealth, buying into the Japanese market may have significant upside potential; and because it's so cheap, low-risk to boot. For Sjuggerud, it's only a matter of time before the yen drops -- and when it does, the companies with strong overseas presence will soar.

Which got us thinking: which Japanese stocks are investors willing to bet on? We looked to the Motley Fool CAPS community, to see which companies they ranked the highest -- how do they rate with you? (Click here to access free, interactive tools to analyze these ideas.)

Company

Industry

Motley Fool CAPS Rating (out of 5)

Performance Over Last Year

Canon (NYSE: CAJ) Photographic Equipment & Supplies *****

28.38%

Honda Motor Co. (NYSE: HMC) Major Auto Manufacturer *****

14.14%

Mitsui & Co. (Nasdaq: MITSY) Conglomerate *****

21.53%

Makita (Nasdaq: MKTAY) Small Tools & Accessories *****

7.13%

Nomura Holdings (NYSE: NMR) Investment Brokerage *****

-25.46%

Interactive Chart: Press Play to see how the market caps have changed for all the stocks mentioned above.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
HMC
$23.52 (-1.80%) $0.43
Canon Inc. Stock Quote
Canon Inc.
CAJ
$22.42 (-1.36%) $0.31
Nomura Holdings, Inc. Stock Quote
Nomura Holdings, Inc.
NMR
$3.37 (-2.60%) $0.09
Makita Corporation Stock Quote
Makita Corporation
MKTAY
$20.15 (-3.12%) $0.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.