Warren Buffett announced that his company, Berkshire Hathaway (NYSE: BRK-B), had purchased shares of 5 Japanese trading companies. It is an unusual investment for Buffett, who has rarely invested in Japan.
The companies are:
1. Itochu (OTC: ITOCY),
2. Marubeni (OTC: MARUF),
3. Mitsubishi (OTC: MSBHF),
4. Mitsui (OTC: MITSF)
5. Sumitomo Mitsui Financial Group (NYSE: SMFG).
Buffett also specifically stated that Berkshire Hathaway’s intention is to hold its Japanese investments for the long term and increase its holdings going forward. A quick look into these 5 Japanese trading companies all exhibit these same 4 investment merits:
1. They’re cheap.
2. They’re safe.
3. They generate a lot of free cash flow.
4. They pay dividends (3.1% to 5.7%)
This is a classic Buffett-style investment that combines value, safety, a lot of free cash flow and pays dividends.
Sven Franssen