Japan Calling

 | Jun 07, 2013 | 12:30 PM EDT  | Comments
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In the 1980s, Japan loomed as the primary economic threat to the U.S. It was buying American companies and American landmarks (such as Rockefeller Center in New York), and its companies -- such as Sony (SNE) and Panasonic -- were the envy of the world, much like Apple (AAPL) and Google (GOOG) are today. Japan looked ready to take over the economic universe.

And then it didn't.

In the past two decades, Japan's image has moved more in the direction of being the sick man of Asia. While China, Korea and Taiwan grew, Japan stagnated. In particular, its stock market, as measured by the Nikkei 225 Index, has not come close to its bubble-induced high of 38,916 in January 1990. Today, the Nikkei trades at about 13,000, two-thirds off its high.

But if you ignore Japan as an investor, you are ignoring the world's third-largest economy after the U.S. and China and -- despite what you have heard -- a country that remains an economic powerhouse. Japan recently reported its gross domestic product grew at an annualized rate of 3.5%, which is better than the U.S. or the European Union. In addition, Japan's stock market, which had been rising most of this year, has slumped in the past couple of weeks and is at or near bear-market levels. This suggests that now is a good time to invest in Japan.

There is a major Japanese company earning approval from my guru strategies; if you want to buy into Japan, pay attention to NTT DoCoMo (DCM). These strategies, by the way, are based on the way well-known Wall Street mavens invest. I've automated their approaches so I can instantly analyze stocks to see which they may favor.

NTT DoCoMo is Japan's largest wireless telecom operator, having about a 44% market share and more than 60 million customers. It is a recognized industry leader and one of the first to launch a high-speed LTE network in 2010 – which is an advantage in a business where technology changes rapidly.

The strategy I base on James P. O'Shaughnessy's approach to investing is highly positive about DoCoMo's large market cap ($64 billion), positive cash flow per share, large number of shares outstanding (4.1 billion) and sales figures ($45 billion). Companies that pass these tests are then ranked based on dividend yield, and the top 50 are chosen to get the highest rating. DoCoMo's yield of 4.92% places it in this elite top-50 group.

Japan is a country worth investing in right now, and DoCoMo is a good stock to use as an entry.

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