Persol Holdings (Formerly Temp Holdings) co. Ltd. (2181 JP)

(A Top Pick April 20, 2017. Up 51.66%). This is a play on the tight Japanese labour market. Persol has done well as a temporary placement agency and has expanded into recruiting, which is a higher-margin business, and is doing well there. Persol was founded by a woman (and it has made her the wealthiest woman in Japan). It finds opportunities for women in an economy that is somewhat male-dominated. This is a distinctive and successful aspect of its business.

This was his top pick in April 2017 and he is sticking with it. The one risk with Persol is that they generate so much cash, they are now investing outside Japan. They say this gives them another avenue for growth if things slow down in Japan, but there is always risk when a company expands in a way that is far afield of its main strength. (Analysts’ price target is 3145¥)

There are one and a half offers for every candidate. You also have women entering into the workforce. Companies need to hire HR firms. He expects double digit growth. They can help you source temporary workers including foreigners. (Analysts’ target: 2745.).

(A Top Pick Dec 16/16, Up 59%) He thinks it will continue to be a great performer. There were two lost decades and he thinks they are exiting the lost decade. They have great exposure to growth in their economy.

(Top Pick Dec 16/16, Up 16%) In Japan you have very low unemployment, with everyone looking for work having 1 and a half offers. This is a human resources company.

Corporations in Japan have to use agencies to help them recruit. It is the job opportunities to applicant ratios. We are seeing tiny increase in wages which we would need to see accelerate to get a full-fledged consumption boom in Japan, but we are getting there. (Analysts’ Target: ¥2400).

A temp employment management company. He is seeing positive signs of employment in Japan. The job offers to applicant ratio is now 1.5X. That means for every individual looking for a job, they are getting 1.5 offers. That is a really good thing for the economy, but is really positive for this company. He also likes that they have now added 5 independent board members to their board. Dividend yield of 0.92%. (Analysts’ price target is ¥2141.67.)

A human resource solutions company. They do temporary staffing, contract services, employment services and some job searching for individuals. Job offers to applicant ratios is 1.3%. For every job applicant, there are 1.3 job offers, which means companies are going to have a hard time finding people and will have to go to these temporary agencies. This is the #2 company in Japan. Dividend yield of 0.77%.

2^nd largest human resource solutions provider in Japan. He is reasonably optimistic on the Japanese economy, mainly because unemployment is at all-time low. Also, household income and wages are starting to go up. It looks sustainable and all of that is good for a placement agency. Expects this to continue. Dividend yield of 0.65%.