From Lisa W. Hess in Forbes:

...One of the most useful indications of how unloved Japanese equities are comes from the wide valuation discrepancies between large and small companies, with the small companies being significantly cheaper.

The Topix, a broad capitalization-weighted index of 1,683 stocks, is to the Nikkei as the S&P 500 is to the Dow. The Topix offers not only a more representative portfolio of Japan Inc. but also meaningfully better value. It sells at five times cash flow (in the sense of earnings before net income plus depreciation) and 0.5 times annual sales, versus 8.8 times cash flow and 0.6 times sales for the Nikkei. The Topix dividend yield is 2%; its price/book ratio is 1.0, equivalent to...

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