Japan stocks

EV/EBITDA sector-relative strategy on JPX vs Nikkei 225 cumulative returns 2006-2025. Strategy returned approximately 87% total.

Japan stocks

EV/EBITDA Sector-Relative Value on Japanese Stocks: Value That Needs Government Help

We backtested sector-relative EV/EBITDA on 19 years of Japanese stocks (JPX, 2006-2025). 3.38% CAGR vs 2.95% Nikkei 225, +0.43% excess. Japan is a deep value market, but the excess is thin and risk-adjusted returns are poor (Sharpe 0.177, MaxDD -49.76%). Discounts close on government policy, not...

P/E compression

Japan P/E Compression: +2.25% Annual Alpha vs Nikkei 225

P/E compression on Japanese stocks returns 5.20% annually vs 2.95% for the Nikkei 225, beating the local benchmark by 2.25% per year with 52% down-capture. The strategy works in Japan when compared against the correct local benchmark.