Toyo Tire has underperformed Topix for the last 12 months: Topix + 17% vs. Toyo -1%.

Then, why am I discussing Toyo Tire now?

I have always liked the Japanese tire industry, which is often cast in a negative light due to its association with the Japanese auto industry. Japanese automakers are currently experiencing a challenging period, especially in China, primarily due to their slow adoption of EVs.

However, the bankruptcy news of Nippon Denkai has had only a minor impact on Toyo Tire, leading me to believe that the challenges faced by Japanese automakers are well-known and at least partially priced in. Further, Artner (2163)’s* robust Q3 FY 2025 and high engineer utilization rate support the underlying strength of the industries Toyo serves.

 

*Artner is a staffing company specializing in dispatching engineers to the auto, semiconductor, and electronics industries.

 

I may be early on Toyo but their high dividend yield of 4.6% provides some downside protection.

 

In my note, I discussed why Toyo has significant upside potential from this point forward. If you’re interested in this analysis or any other notes on Japanese stocks with high potential, please consider opening an account. My pricing is very reasonable, starting at $2,500 for six months.