Since 1996, The Applied Finance Group has excelled at identifying mispriced securities and helping our clients take advantage of such mispricings within the
US markets. Over the last few years, AFG has been working on expanding our framework internationally to help our clients identify solid long-term equity investment opportunities on a global scale. Our global research site, AFGViewGlobal.com has coverage on over 30,000 companies with back-test results proving that the same group of variables that have proven successful on a domestic level are quite successful at identifying winners and losers all over the world.
Below is a look at the 10 most undervalued stocks in the Nikkei 225, the most widely quoted average of Japanese equities within the Tokyo Stock Exchange (TSE). According to AFG’s valuation model these companies look to be attractively priced and have considerable long-term upside. We will monitor these 10 stocks through time and compare them against the overall index and provide our performance relative to the overall index just as we have done over the last 7 months with our US Buy recommendations (see ValueExpectations.com buy/sell spread results here).
10 Most Undervalued Stocks - Nikkei 225
AFG's default valuation is a great place to start when looking for potential equity investments as our valuation techniques have proven successful through time at identifying mispriced securities and helping our clients identify investment opportunities resulting in outperforming their chosen benchmark.
AFG's Valuation Model – Using AFG’s modified discounted cash flow model to measure the intrinsic value of a firm compared to its peers. AFG's Value Score - A score which represents the ranked percent to target (deviation between stock’s current trading price and AFG’s current default target price) or attractiveness (upside) relative to the universe. A Value Score of 100 is the most undervalued and 0 is the most overvalued company in the universe.
The table below shows the returns of each country broken down by AFG valuation Top/Bottom Half companies vs. the entire universe. AFG's default valuation works well across sectors, styles, industries and even different countries. Check out the spraeds between Top and Bottom Half companies based on AFG valuation.
Annualized Returns - Valuation Rank
Source: AFGView Databases:
World Return is the weighted US$ return for the 17 countries shown. It is calculated by converting each country's return into US$ returns and weighting them at its beginning period country market caps.
*Canada data begins 6/30/2004, Taiwan data begins 2/28/1995
Equal Weighted, Monthly Re-balanced Total Returns.
