#317: Our Favorite Japanese Stocks

This week, Mike and Emmet head to Japan in search of overlooked growth stocks.Japan is home to some of the world's oldest businesses, with more than 140 companies claiming histories of over 500 years. Many of them have survived by following two simple rules: hold plenty of cash and avoid debt. But after decades of economic stagnation, a new wave of corporate reforms is pushing Japanese businesses to become more growth-oriented and shareholder-friendly.To uncover some of the market's most promising opportunities, Emmet screens the entire Japanese stock market for companies with market caps below $20 billion, strong returns on equity, high returns on invested capital, and rapidly accelerating revenue growth.One company that stands out is Sanrio (8136.T), the owner of some of Japan's most recognizable intellectual property. Despite growing revenue at an impressive pace in recent years, its valuation has actually become cheaper relative to its historical averages—a combination investors rarely get to see.Mike then pitches his favorite company of the bunch: Smaregi (4431.T), a fast-growing software business often described as Japan's answer to Square. While countries like China and South Korea have embraced digital payments, Japan remains surprisingly dependent on cash. As the country pushes toward a cashless future, Smaregi's point-of-sale and merchant software platform could be perfectly positioned to benefit.The pair also explore VRAIN Solution (135A.T), an AI-powered manufacturing software company helping factories automate quality control and safety inspections, ANYCOLOR (5032.T), one of the most unusual media businesses you'll ever encounter, and BuySell Technologies (7685.T), a fast-growing platform capitalizing on Japan's booming second-hand luxury and collectibles market.Finally, Emmet shares his favorite idea from the entire list: OneCareer (4377.T), a founder-led recruitment and career platform that combines elements of LinkedIn, Glassdoor, and SaaS software. With revenue growing more than 40% annually and returns on equity continuing to climb, it could be one of the most compelling small-cap growth stories in Japan today.Psssst…. We don’t think you’ll want to miss this year’s Investicon. Grab your early bird tickets now: https://www.investicon.ie/Prophet, MyWallSt's latest investing service, is focused on delivering market-beating in less than 5 minutes a month.Click here to join now or email [email protected] for a deal.Become a successful investor by checking out all the content MyWallSt has to offer:📚 Learn the fundamentals of investing by downloading our free Learn app: https://bit.ly/3DXPOz7💻 Keep updated on stock market news by visiting our blog: https://mywallst.com/blog/🎧 Tune in to our podcast Stock Club to stay updated on weekly news: https://mywallst.com/stock-investment-podcast/🎉 Follow MyWallSt on social:❌ X: @MyWallStHQ💃 TikTok: @MyWallSt📸 Instagram: @MyWallSt🖥️ Facebook: @MyWallSt👔 LinkedIn: MyWallSt00:00 Intro01:02 The Japanese Stock Market10:37 Sanrio Breakdown15:08 Smaregi’s Cashless Wave26:32 Vrain AI Factories30:22 ANYCOLOR VTuber Empire34:37 BuySell Technologies37:14 OneCareer HR Data SaaS