When Warren Buffett likes something, investors pay attention. And for the past few years, the Oracle of Omaha has been quietly building a significant position in Japanese trading houses. Now one of those investments is showing some cracks.
Mitsubishi Corp. (MSBHF), one of Japan's largest general trading companies, just experienced a dramatic slide in its growth metrics following disappointing second-quarter results. The company operates across a sprawling empire of businesses including mining, energy, retail, chemicals, and infrastructure projects. And yes, Berkshire Hathaway (BRK.B) is a major shareholder, currently holding a 10.23% stake that Buffett has accumulated over recent years.
The Numbers Tell the Story
Growth scores measure how quickly a company is expanding its revenue and earnings, looking at both short-term and long-term performance before ranking stocks relative to the entire market. Think of it as a report card for business expansion.
Mitsubishi's growth score crashed from 93.13 to 55.8 within a single week. That's not a typo. The culprit? Second-quarter earnings that showed profits tumbling 42% year-over-year, driven primarily by weakness in coal prices during the period.
A drop like this typically signals that weak quarterly performance is starting to weigh on a company's longer-term growth trajectory and fundamental outlook. It's one thing to have a bad quarter; it's another when that quarter drags down your overall growth profile.
The Bigger Picture
Here's where things get interesting. Despite the earnings stumble and concerns swirling around global energy markets, commodities prices, and trade uncertainties, Mitsubishi's stock has actually soared 42.8% year-to-date. That's a pretty impressive run for a company that just reported a 42% profit decline.
The likely explanation? The Buffett factor. The Wizard of Omaha has been steadily building positions in Mitsubishi and several of its peers in Japan's general trading sector, and markets tend to follow where Buffett leads. His growing conviction in these Japanese conglomerates has provided a powerful tailwind for the stocks, even as fundamentals have wobbled.
Mitsubishi now sits with a growth score of 55.8, firmly in the middle of the pack rather than near the top where it stood just days ago. The question for investors is whether this represents a temporary setback in a longer growth story, or the beginning of more sustained headwinds for a company deeply tied to global commodity cycles.
