Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

We screened for names with little or no coverage that have been growing over the last couple of years and the valuations look really good. For the forecast numbers, we are using company guidance as most of the names do not have Analyst coverage. Basically we are looking for names that are not well known but are growing and valuations are cheap.Names with very low PE ratios are <a href="https://www.smartkarma.com/entities/15900" target="_blank" data-smartkarma-citation="entities:15900:1">Sanyo Special Steel Co Ltd (5481 JP)</a> with a 2x PE, <a href="https://www.smartkarma.com/entities/9957" target="_blank" data-smartkarma-citation="entities:9957:1">Toenec Corp (1946 JP)</a> with a 3x PE and <a href="https://www.smartkarma.com/entities/1972" target="_blank" data-smartkarma-citation="entities:1972:1">Organo Corp (6368 JP)</a> with a…

We screened for names with little or no coverage that have been growing over the last couple of years and the valuations look really good. For the forecast numbers, we are using company guidance as most of the names do not have Analyst coverage. Basically we are looking for names that are not well known but are growing and valuations are cheap.Names with very low PE ratios are Sanyo Special Steel Co Ltd (5481 JP) with a 2x PE, Toenec Corp (1946 JP) with a 3x PE and Organo Corp (6368 JP) with a…

Small-Cap Growth Names with Good Valuations in Japan....

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

<ul><li>Offerings of equities and convertible bonds totaled 720 billion yen over the first nine months of '16 and the trend continues unabated. Its the lowest level of new offerings in four years.</li><li>Meanwhile, stock buybacks have soared to a record 4.35 trillion yen (USD$41.8 bn)--the most in history presumably to shore up capital efficiency.</li><li>Opponents in principle claim buybacks inhibit growth, and investment and also impede wage growth which in turn, keeps spending sluggish.</li><li>Do Japan's persistent low GDP numbers reflect some of this corporate policy strategies? Does the same phenomenon apply to the US? </li></ul>

Offerings of equities and convertible bonds totaled 720 billion yen over the first nine months of '16 and the trend continues unabated. Its the lowest level of new offerings in four years.Meanwhile, stock buybacks have soared to a record 4.35 trillion yen (USD$41.8 bn)--the most in history presumably to shore up capital efficiency.Opponents in principle claim buybacks inhibit growth, and investment and also impede wage growth which in turn, keeps spending sluggish.Do Japan's persistent low GDP numbers reflect some of this corporate policy strategies? Does the same phenomenon apply to the US? 

Could Japan's Aggressive Stock Buyback Spree Slow an Economic Rebound?

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

On Jan. 19, <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba Corp (6502 JP)</a> reported that it will likely book a combined noncash charge of up to JPY 700 billion, mainly for goodwill impairments on the U.S. nuclear business acquisition through its U.S. subsidiary, Westinghouse. The scale of impairment significantly exceeded the market expectation at the end of last year, as it is likely to push Toshiba’s thin net equity position of JPY 360 billion into a deficit, with potential delisting from the Tokyo Stock Exchange in sight.As the second-largest diversified industry group after Hitachi, Toshiba maintains a membership status within the Mitsui “zaibatsu” group, a cross-industry alliance of leading domestic companies dating back to the 16th century. According to a press report, as of the end of September 2016, Toshiba maintains a total of JPY 798.7 billion in loans outstanding, consisting of: (1) JPY 110 billion for Sumitomo Mitsui Banking Corporation (<a href="https://www.smartkarma.com/entities/217" target="_blank" data-smartkarma-citation="entities:217:1">Sumitomo Mitsui Financial Group (8316 JP)</a>); (2) JPY 110 billion for Mizuho Bank (<a href="https://www.smartkarma.com/entities/219" target="_blank" data-smartkarma-citation="entities:219:1">Mizuho Financial Group Inc (8411 JP)</a>); (3) JPY 102 billion for Bank of Tokyo Mitsubishi UFJ and Mitsubishi UFJ Trust (<a href="https://www.smartkarma.com/entities/218" target="_blank" data-smartkarma-citation="entities:218:1">Mitsubishi UFJ Financial Gro (8306 JP)</a>); and (4) JPY 75 billion for Sumitomo Mitsui Trust Bank (<a href="https://www.smartkarma.com/entities/19450" target="_blank" data-smartkarma-citation="entities:19450:1">Sumitomo Mitsui Trust Holdings (8309 JP)</a>).Anlayst: Mari Kumagai

On Jan. 19, Toshiba Corp (6502 JP) reported that it will likely book a combined noncash charge of up to JPY 700 billion, mainly for goodwill impairments on the U.S. nuclear business acquisition through its U.S. subsidiary, Westinghouse. The scale of impairment significantly exceeded the market expectation at the end of last year, as it is likely to push Toshiba’s thin net equity position of JPY 360 billion into a deficit, with potential delisting from the Tokyo Stock Exchange in sight.As the second-largest diversified industry group after Hitachi, Toshiba maintains a membership status within the Mitsui “zaibatsu” group, a cross-industry alliance of leading domestic companies dating back to the 16th century. According to a press report, as of the end of September 2016, Toshiba maintains a total of JPY 798.7 billion in loans outstanding, consisting of: (1) JPY 110 billion for Sumitomo Mitsui Banking Corporation (Sumitomo Mitsui Financial Group (8316 JP)); (2) JPY 110 billion for Mizuho Bank (Mizuho Financial Group Inc (8411 JP)); (3) JPY 102 billion for Bank of Tokyo Mitsubishi UFJ and Mitsubishi UFJ Trust (Mitsubishi UFJ Financial Gro (8306 JP)); and (4) JPY 75 billion for Sumitomo Mitsui Trust Bank (Sumitomo Mitsui Trust Holdings (8309 JP)).Anlayst: Mari Kumagai

Minimal Impact From Larger Credit Loss on Toshiba; Maintaining FVE for Major Japanese Banks

Four major banks under our coverage reported better-than-expected results, indicating an inflection point in their earning structure. In aggregate, of four major banks under our coverage, the numbers are similarly down across most metrics. On average, net income fell 11% from the year-ago period with operating income decreasing 19% from the year ago period. Momentum in trading and commission, both tracking the midcycle average, failed to offset lower net interest income, down 13% from the year-ago period to JPY 2,072 billion for the three major banks. Management for three major banks did not object to market consensus of JPY 300 billion negative earning impacts since the implementation of Bank of Japan's negative interest rate policy earlier this year. Management also maintained their full-year net profit forecast unchanged, citing their cautious stance after the election results. However, they also mentioned that further downside from the policy implementation is likely to be limited after the BoJ is transitioning its policy to control the yield curve instead.Our top pick will be <a href="https://www.smartkarma.com/entities/218" target="_blank" data-smartkarma-citation="entities:218:1">Mitsubishi Ufj Financial Gro (8306 JP)</a> as it is best-positioned to benefit from its underappreciated global business exposure with about a quarter of its earning assets tied to U.S. markets. This excludes a 23% lucrative equity investment in Morgan Stanley. We will revise our fair value estimates with a detailed earnings note on each respective bank in coming weeks.Analyst: Mari Kumagai

Four major banks under our coverage reported better-than-expected results, indicating an inflection point in their earning structure. In aggregate, of four major banks under our coverage, the numbers are similarly down across most metrics. On average, net income fell 11% from the year-ago period with operating income decreasing 19% from the year ago period. Momentum in trading and commission, both tracking the midcycle average, failed to offset lower net interest income, down 13% from the year-ago period to JPY 2,072 billion for the three major banks. Management for three major banks did not object to market consensus of JPY 300 billion negative earning impacts since the implementation of Bank of Japan's negative interest rate policy earlier this year. Management also maintained their full-year net profit forecast unchanged, citing their cautious stance after the election results. However, they also mentioned that further downside from the policy implementation is likely to be limited after the BoJ is transitioning its policy to control the yield curve instead.Our top pick will be Mitsubishi Ufj Financial Gro (8306 JP) as it is best-positioned to benefit from its underappreciated global business exposure with about a quarter of its earning assets tied to U.S. markets. This excludes a 23% lucrative equity investment in Morgan Stanley. We will revise our fair value estimates with a detailed earnings note on each respective bank in coming weeks.Analyst: Mari Kumagai

1H16 Better-Than-Expected Results Suggest Earnings Inflection Points; Positive For Japanese Banks

The Bank of Japan has just released its semiannual assessment on the financial system with an explicit focus on the negative interest rate environment. We view positively that the bank has acknowledged increasing side effects even after the bank has recalibrated its policy with a new focus on yield curve control.The hurdle of implementing the NIRP has been high for Japanese banks due to a higher proportion of funding is  derived from deposits at 72% against 43% for eurozone banks and 31% for Swedish banks. An inability to reprice  its deposit below zero negatively impacts bank earnings, encumbered with low pricing power due to low market concentration. An aging demographic is also adding pressure to regional banks. Half of regional banks fail to earn operating profits from lending, even assuming minimal credit charges, as they remain unable to cope with greater structural challenges. Per the central bank estimate on NIM compression, about 50% is attributed to lower market rates, about 30% to unfavorable demographics and about 20% to weak loan demand at regional banks.Analyst: Mari Kumagai

The Bank of Japan has just released its semiannual assessment on the financial system with an explicit focus on the negative interest rate environment. We view positively that the bank has acknowledged increasing side effects even after the bank has recalibrated its policy with a new focus on yield curve control.The hurdle of implementing the NIRP has been high for Japanese banks due to a higher proportion of funding is  derived from deposits at 72% against 43% for eurozone banks and 31% for Swedish banks. An inability to reprice  its deposit below zero negatively impacts bank earnings, encumbered with low pricing power due to low market concentration. An aging demographic is also adding pressure to regional banks. Half of regional banks fail to earn operating profits from lending, even assuming minimal credit charges, as they remain unable to cope with greater structural challenges. Per the central bank estimate on NIM compression, about 50% is attributed to lower market rates, about 30% to unfavorable demographics and about 20% to weak loan demand at regional banks.Analyst: Mari Kumagai

Lack of Term Premium Continues to Cost Japanese Banks with Limited Financial Flexibility

Japan

Fuyo General Lease Co Ltd leases machinery and equipment.  The Company also provides other financial services such as installment sale and lending.

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