I’m also staying invested in this Japanese quality company.
Advantest raises its annual forecast by 35 percent and drives the Nikkei higher.
Japanese semiconductor specialist Advantest played a key role in the massive rally on the Tokyo Stock Exchange today, Monday. While the benchmark Nikkei 225 index gained more than 1,300 points, Advantest proved to be the main driver of gains for the entire market segment.
The reason for the massive buying pressure is a significant 35 percent increase in the annual earnings forecast, which was very well received by investors.
Strong Performance Amid Increased Risk
Today’s price reaction underscores the stock’s impressive momentum. In today’s trading, the stock climbed 7.19 percent to a price of 187.58 euros. This impressively continues the trend seen so far this year: Since the beginning of the year, the stock’s gain has already totaled 75.51 percent. From a long-term perspective, the company has posted an average annual return of nearly 47 percent over the past decade.
Despite this track record, market observers are also urging caution regarding volatility. The so-called loss ratio, a measure of investment risk, is currently reported at 4.19, which indicates a comparatively high level of risk. Investors should therefore expect significant fluctuations with this growth stock, even though the company’s operating performance currently provides a strong foundation thanks to the raised earnings forecast.
