[Click eStock] "Shareholder Meeting Season Kicks Off... Focus on Small and Mid-Cap Value Stocks"

As the shareholder meeting season officially begins, advice has emerged to focus on small and mid-cap value stocks, which have shown less price appreciation so far.

Seonghoon Lee, a researcher at Kiwoom Securities, stated in a report on the 18th, "In terms of size, small and mid-cap value stocks are expected to have higher entry attractiveness compared to large-cap value stocks, which have experienced steep price increases." He added, "Starting this week, as we enter the shareholder meeting season, there is an opportunity to find prospects in small and mid-cap stocks as we can observe movements toward increased shareholder returns not only among large corporations but also among smaller companies."

Recently, the stocks driving the upward trend within the value-up theme have been large companies such as financial holding firms and automobile manufacturers. This is attributed to large corporations having smoother IR communication with the market and responding swiftly to regulatory policy directions. Researcher Lee explained, "As expectations related to value-up were highlighted mainly among large-cap stocks, foreign investor demand, the leading force in market supply and demand, concentrated on large-cap value stocks."

Lee also noted, "Looking at the case in Japan a year ago, foreign investor inflows slowed down, and a rebound in small-cap value stocks appeared after mid-June, when most Japanese companies with March fiscal year-ends hold their shareholder meetings."

Considering major macro events scheduled for this week, such as the Federal Open Market Committee (FOMC) meeting, he expects that large value-up stocks, which have been driven by foreign investor demand, will enter a short-term consolidation phase.

He believes that a key point in this year’s regular shareholder meetings will be whether companies confirm their willingness to expand shareholder returns from a value-up perspective. Furthermore, in the current environment where value-up expectations persist, mentioning 'policies to expand shareholder returns' at shareholder meetings could act as a catalyst for additional stock price increases.

Researcher Lee stated, "This year, as in the past five years’ shareholder meeting trends, numerous shareholder proposals have been submitted, mainly by domestic and foreign activist funds and small shareholder coalitions." He added, "Most of these proposals are directly or indirectly related to expanding shareholder returns, and this atmosphere is expected to encourage companies to voluntarily increase shareholder returns."

This content was produced with the assistance of AI translation services.