With Australia’s State of Origin Rugby Match this evening, we thought it would be fun to compare historical price performance of Tokyo-based companies vs. Osaka-based companies and then all the other city outside of Tokyo. Now we looked back over the last 15 years and Osaka-based companies have clearly done better. Osaka-based companies are up 84% compared to Tokyo-based companies that are only up 14% over the last 15 years. Other-based companies also did well and are up 60% since 2001.
Now our first thought was that there was a small-cap bias. However when we limit all the universes to between 100 and 400 ¥bn mkt-cap, Osaka still does better. Tokyo-based companies are down 2% over the 15 years. Osaka-based companies are up 58% and other-based companies are up 40%. We then thought that maybe the Fundamentals are better in companies outside of Tokyo. This is not the fact. We compared aggregate Sales growth for Tokyo-based companies and Osaka-based companies and there is not a significant difference. The same holds true for aggregate OP Margins.
Right now we do not have a good explanation of why on average Osaka-based companies have done better. However, if you are looking at similar companies with one in Osaka and one it Tokyo, it might be worth looking hard the Osaka one.
Contact Us for access to the Charts & Screens