Asahi with 38% market share, the largest major beer producer in Japan has been flagged in OTAS this morning as the top positive name in NKY225. In terms of valuation, divergence, dividend trend and our OTAS technical signal, this stock was positively flagged. Perhaps it is time to look at Asahi with a defensive nature as Japan has officially entered into a bear market TOPIX -23% from August 2015 high.
Japan beer drinkers favour domestic brews such as Asahi, Suntory, Sapporo and Kirin. The largest four brewers have a combined market share of 90% in Japan but Asahi only had a 1.2% global market share.
However according to recent Reuters news shown on OTAS, Asahi is bidding for the Italian brewer Peroni and the Dutch brewer Grolsch to support the company’s overseas growth strategy and increase the presence in the global market.
Valuation wise, the P/E vs MSCI Japan is trading at a 2 year low. The 12 month forward P/E valuation of 17.1x is very low relative to valuations over the past two years.
EPS momentum of Asahi is among the top 20% of all the positive performers in the industry group. Even though price was down by 1.7%, the EPS was up by 11.1% since last month.
Dividend yield trend is picking up significantly with 12 month forward yield of 1.8% which is very high relative to the sector over the past two years.
Lastly, with the full year earnings release on February 9th 2016 and the positive OTAS Full Stochastic (+) signal which fired three days ago (indicating that on average there will be a 1.3% return over the coming 20 trading days), we can consider to add this as a defensive stock to our portfolio in this bear market.