Oakmark’s David Herro says he’s finding opportunities in an area many investors are shunning: Japan.

While Japan has been dogged by weak economic growth, a languishing stock market, and long-term deflation, Herro tells Morningstar that “the pessimistic macro story obscures value opportunities in Japan at the company level. Quite simply, despite the weakening in the price of Japanese equities, business performance continues to improve. Japan is definitely the cheapest major market, so then the question becomes, ‘Is it of value?'”

He thinks it is. Stocks are cheap, he says, and management teams are being more efficient and are boosting shareholder returns through dividends and stock repurchases. Another factor: Japan has the oldest population among developed countries, and the world’s longest life expectancy, he says. “That means people are likely worried about outliving their money,” he says, which means more Japanese people, and institutions like pension funds, are turning to higher-yielding opportunities like stocks.

Herro, one of Morningstar’s fund managers of the decade, also says many Japanese firms are benefiting from emerging market growth, and offer exposure to those high-growth regions without the high prices of emerging market stocks.

Herro also talks a bit about his overall approach. “The key things we’re looking for are companies whose stock is trading at a significant discount to our estimate of its underlying business value, companies with strong free cash flow and a good plan for how to use that cash, and companies whose management has a high level of ownership to ensure that its interests are aligned with that of its shareholders,” he says.

Right now, Herro says he’s finding value investment opportunities “pretty much all over the world, with the possible exception of the emerging markets and the natural-resources stocks, both of which are correlated and both of which are looking a little pricey.”