Source: Wall Street News
The media quoted people familiar with the matter as saying that the scale of Elliott's investment in Sumitomo Corporation is about “tens of billions of yen.” Based on Sumitomo Corporation's closing price of 3,909 yen on Friday, every 10 billion yen invested is equivalent to 0.2% of Sumitomo Corporation's shares.
Wall Street's “vulture” fund Elliott, known for its aggressive strategies, was recently revealed to have large-scale holdings$Sumitomo (8053.JP)$The company is also one of Buffett's most popular Japanese trading companies.
On April 28, media quoted people familiar with the matter as saying that Elliott's investment scale is about “tens of billions of yen,” but the deal has not been publicly disclosed. Based on Sumitomo Corporation's closing price of 3,909 yen on Friday, every 10 billion yen (63 million US dollars) of investment is equivalent to 0.2% of Sumitomo Corporation's shares.
Notably, the Japanese stock market has recently become one of the preferred markets for aggressive investors, as the Japanese government and the Tokyo Stock Exchange require companies to better manage their balance sheets and adjust business strategies to improve shareholder returns. Meanwhile, Elliott has already contacted Sumitomo Corporation and shared its views on creating shareholder value. They have done similar things before, such as pushing for reforms in companies such as Toshiba and SoftBank.
Elliott's spokesperson declined to comment, and Sumitomo Corporation also said it would not comment on the shareholder situation.
Sumitomo Corporation is the fourth largest trading company in Japan, with a market capitalization of 4.8 trillion yen, according to data compiled by Bloomberg. Its net price-earnings ratio is 1.1 and the estimated price-earnings ratio is 9.5, all the lowest among peers. Meanwhile, Sumitomo Corporation's fiscal year 2023 results will be announced on Thursday, and the company will also announce its mid-term business plan at that time.
It is worth mentioning that Buffett has also always been optimistic about Japanese trading companies, his company$Berkshire Hathaway-A (BRK.A.US)$/$Berkshire Hathaway-B (BRK.B.US)$It holds 8.3% of Sumitomo Corporation's shares. However, Sumitomo Corporation's performance did not disappoint Buffett. The company's stock price has risen 27% since this year and reached a record high last week.
Additionally, Buffett has invested in other Japanese trading companies, including$Mitsubishi (8058.JP)$,$Mitsui (8031.JP)$,$ITOCHU (8001.JP)$und$Marubeni (8002.JP)$It also expressed hope to eventually hold 9.9% of each company's shares.
editor/tolk