Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Today after the close, <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> announced it would buy back up to 100,000,000 shares for up to ¥50 billion. The <a href="https://www.yamada-denki.jp/topics/download.t.pdf/1833" target="_blank" rel="noopener">announcement</a> is only in Japanese. The buyback will take place from 2 April 2020 (today) through 24 March 2021. The announcement has a blank spot where normally a company tells you what percent of shares outstanding the buyback is for. The arithmetic is easy. It is 11.4%. Which is a LOT. Often these buybacks are slightly compromised compared to the announcement because if you divide the total yen amount that could be spent by the total number of shares which could be bought, you end up with a price well below the price at time of announcement (i.e. they will run into the limit of amount spent before reaching the share count. In this case, there is a buffer of 20% to the upside.This buyback appears designed to buy back shares at an average price below the conversion price of the convertible bond which was converted last summer, and increase capital efficiency. The possibilities, modalities, parameters, and methods are discussed below.

Today after the close, Yamada Denki (9831 JP) announced it would buy back up to 100,000,000 shares for up to ¥50 billion. The announcement is only in Japanese. The buyback will take place from 2 April 2020 (today) through 24 March 2021. The announcement has a blank spot where normally a company tells you what percent of shares outstanding the buyback is for. The arithmetic is easy. It is 11.4%. Which is a LOT. Often these buybacks are slightly compromised compared to the announcement because if you divide the total yen amount that could be spent by the total number of shares which could be bought, you end up with a price well below the price at time of announcement (i.e. they will run into the limit of amount spent before reaching the share count. In this case, there is a buffer of 20% to the upside.This buyback appears designed to buy back shares at an average price below the conversion price of the convertible bond which was converted last summer, and increase capital efficiency. The possibilities, modalities, parameters, and methods are discussed below. 

Yamada Denki Buyback - Big Impact But Risky

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Consumer electronics retailer <a href="https://www.smartkarma.com/entities/k-s-holdings-corp" target="_blank" data-smartkarma-citation="entities:13745:1" rel="noopener">K'S Holdings (8282 JP) </a>has had two excellent years by pursuing a policy that its rivals have all but abandoned. It has cut its range down to concentrate on home appliances, removing more technologically fast-moving gadgets, while focusing on large stores out in the suburbs. Despite this success, it faces market saturation.<a href="https://www.smartkarma.com/entities/k-s-holdings-corp" target="_blank" data-smartkarma-citation="entities:13745:1" rel="noopener"> </a>

Consumer electronics retailer K'S Holdings (8282 JP) has had two excellent years by pursuing a policy that its rivals have all but abandoned. It has cut its range down to concentrate on home appliances, removing more technologically fast-moving gadgets, while focusing on large stores out in the suburbs. Despite this success, it faces market saturation. 

Event-Driven

Major Japanese broadcaster <a href="https://www.smartkarma.com/entities/tokyo-broadcasting-system" target="_blank" data-smartkarma-citation="entities:12981:1" rel="noopener">Tokyo Broadcasting System (9401 JP)</a> has a long history of being a target for wannabe activists. The company has long held a large securities portfolio, anchored by shares in <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a> (Tokyo Electron was originally a spinoff of TBS) and <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a>. The company has long had cash and other securities, and a decent chunk of real estate in a prime area of Akasaka (for a while I even used to work next to their HQ, and walked through the grounds on the way to the subway every day). But the company has long rebuffed corporate overtures to bring it into new businesses, and investor overtures to get to With a new buyback program announced last week after a sale of some securities, the company has finally thrown shareholders - and the two known activists - a bone.It is a tiny bone, with most of the meat already picked off.These two activists together may hold &lt;3% of shares out. They have too little heft to compete against management backed by corporate and financial crossholders who appear to hold more like 55+%. While there is tremendous value in the shares, it is not clear that TBS has any interest in selling its assets other than little by little, providing a little cash to shareholders here and there, and investing the rest.More below.

Major Japanese broadcaster Tokyo Broadcasting System (9401 JP) has a long history of being a target for wannabe activists. The company has long held a large securities portfolio, anchored by shares in Tokyo Electron (8035 JP) (Tokyo Electron was originally a spinoff of TBS) and Recruit Holdings (6098 JP). The company has long had cash and other securities, and a decent chunk of real estate in a prime area of Akasaka (for a while I even used to work next to their HQ, and walked through the grounds on the way to the subway every day). But the company has long rebuffed corporate overtures to bring it into new businesses, and investor overtures to get to With a new buyback program announced last week after a sale of some securities, the company has finally thrown shareholders - and the two known activists - a bone.It is a tiny bone, with most of the meat already picked off.These two activists together may hold &lt;3% of shares out. They have too little heft to compete against management backed by corporate and financial crossholders who appear to hold more like 55+%. While there is tremendous value in the shares, it is not clear that TBS has any interest in selling its assets other than little by little, providing a little cash to shareholders here and there, and investing the rest.More below.

The Activism at TBS - There's a History, And There Is NEW Activity, But Don't Hold Your Breath

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

- MARKET COMPOSITE -<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/882/original/2019-02-24_11-07-12.png?1550974089" class="editor-image img-responsive" data-smartkarma-image-id="79882"></figure><div class="content-caption">Source: Japan Analytics</div>ALMOST THREE-MONTH HIGH RECOVERY - The bear market rally is now in its second stage, and the market composite is now 14% above the Christmas Day low. The 'market value'-based percentage above moving averages almost reached a new three-month on Thursday; the stock count version is lagging as usual.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/886/original/2019-02-24_11-32-45.png?1550975583" class="editor-image img-responsive" data-smartkarma-image-id="79886"></figure><div class="content-caption">Source: Japan Analytics</div>STILL SOME UPSIDE - Using the three-month rate of change in this indicator, we are a few weeks away from generating a short-term sell signal, the last such trigger having occurred on 25th October. <hr>- SECTORS - <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/887/original/2019-02-24_11-45-38.png?1550976349" class="editor-image img-responsive" data-smartkarma-image-id="79887"></figure><div style="text-align: left;" class="content-caption">
LEGEND: The 'sparklines' show the three-year trend in the weighted percentage above moving average relative to the Market Composite and the 'STDev' column is a measure of the variability of that relative measure. The table also provides averages for the breaks above and breaks below and the positive and negative crossovers.</div>SECTOR BREAKDOWN - The top six sectors remain domestic and defensive. REITs, Information Technology, Transporation and Utilities continue from our previous review with Restaurants and Healthcare replacing Media and Telecommunications. Equally predictable is the bottom half-dozen - Banks, Non-Bank Finance, Autos, and Metals remain from two weeks ago, with Construction and Retail replacing Chemicals and Other Materials. <hr>- COMPANIES -COMPANY MOVING AVERAGE OUTLIERS - As with the Market Composite and Sectors, the Moving Average Outlier indicator uses a weighted sum of each company's share price relative to its 5-day, 20-day, 60-day, 120-day and 240-day moving averages. 'Extreme' values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen. <div class="content-highlight">
In the DETAIL section below, we highlight the current top and bottom twenty-five large capitalisation outliers, as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note.
<a href="https://www.smartkarma.com/entities/26181" target="_blank" data-smartkarma-citation="entities:26181:1">PKSHA Technology (3993 JP)</a> is currently the most extreme large capitalisation positive outlier and an excellent example of a -100 to 100 'roundtrip' in under two months. <a href="https://www.smartkarma.com/entities/24540" target="_blank" data-smartkarma-citation="entities:24540:1">SanBio (4592 JP)</a> is, again, the most extreme negative outlier, having topped the 13th January positive outlier list and is another 'round-tripper'. We also add the chart for 'cockroach' stock <a href="https://www.smartkarma.com/entities/8244" target="_blank" data-smartkarma-citation="entities:8244:1">Leopalace21 (8848 JP)</a> which no longer qualifies for inclusion in our tables, having lost 60% of its value in the last two weeks and 79% in less than a year.
</div><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/890/original/2019-02-24_12-58-23.png?1550980729" class="editor-image img-responsive" data-smartkarma-image-id="79890"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/891/original/2019-02-24_12-59-54.png?1550980806" class="editor-image img-responsive" data-smartkarma-image-id="79891"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/892/original/2019-02-24_13-12-58.png?1550981589" class="editor-image img-responsive" data-smartkarma-image-id="79892"></figure>Source: Japan Analytics
</div>

- MARKET COMPOSITE -Source: Japan AnalyticsALMOST THREE-MONTH HIGH RECOVERY - The bear market rally is now in its second stage, and the market composite is now 14% above the Christmas Day low. The 'market value'-based percentage above moving averages almost reached a new three-month on Thursday; the stock count version is lagging as usual.Source: Japan AnalyticsSTILL SOME UPSIDE - Using the three-month rate of change in this indicator, we are a few weeks away from generating a short-term sell signal, the last such trigger having occurred on 25th October. - SECTORS - 
LEGEND: The 'sparklines' show the three-year trend in the weighted percentage above moving average relative to the Market Composite and the 'STDev' column is a measure of the variability of that relative measure. The table also provides averages for the breaks above and breaks below and the positive and negative crossovers.SECTOR BREAKDOWN - The top six sectors remain domestic and defensive. REITs, Information Technology, Transporation and Utilities continue from our previous review with Restaurants and Healthcare replacing Media and Telecommunications. Equally predictable is the bottom half-dozen - Banks, Non-Bank Finance, Autos, and Metals remain from two weeks ago, with Construction and Retail replacing Chemicals and Other Materials. - COMPANIES -COMPANY MOVING AVERAGE OUTLIERS - As with the Market Composite and Sectors, the Moving Average Outlier indicator uses a weighted sum of each company's share price relative to its 5-day, 20-day, 60-day, 120-day and 240-day moving averages. 'Extreme' values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen. 
In the DETAIL section below, we highlight the current top and bottom twenty-five large capitalisation outliers, as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note.
PKSHA Technology (3993 JP) is currently the most extreme large capitalisation positive outlier and an excellent example of a -100 to 100 'roundtrip' in under two months. SanBio (4592 JP) is, again, the most extreme negative outlier, having topped the 13th January positive outlier list and is another 'round-tripper'. We also add the chart for 'cockroach' stock Leopalace21 (8848 JP) which no longer qualifies for inclusion in our tables, having lost 60% of its value in the last two weeks and 79% in less than a year.

Source: Japan Analytics


🇯🇵 Japan: Moving Average Outliers - PKSHA, SanBio, Goldwin, ZOZO, Drugstores & ASICS

- MARKET COMPOSITE -
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/076/724/original/2019-01-26_17-35-03.png?1548496734" class="editor-image img-responsive" data-smartkarma-image-id="76724"></figure>
<div class="content-caption">Source: Japan Analytics</div>
SLOW &amp; STEADY RECOVERY - From December 25th's lows of 8% by number and 11% by value, the percentages of Japanese stocks above the weighted sum of moving averages have continued to recover to now 19% by number and 26% by value. Total Market Value has now risen by 11.2% from the Christmas Day low and is overdue a 'breather'.
<hr>
- SECTORS -
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/076/725/original/2019-01-26_17-29-21.png?1548497304" class="editor-image img-responsive" data-smartkarma-image-id="76725"></figure>
<div class="content-caption">
LEGEND: The 'sparklines' show the three-year trend in the weighted percentage above moving average relative to the Market Composite and the 'STDev' column is a measure of the variability of that relative measure. The table also provides averages for the breaks above and breaks below and the positive and negative crossovers.</div>
SECTOR BREAKDOWN - The top six sectors measured by their percentage above the weighted average of 5-240 Days remain domestic and defensive. REITs, Information Technology, Media, Healthcare and Utilities continue from our previous review with Restaurants replacing Transportation. Equally predictable is the bottom half-dozen - Banks, Autos, Metals, Building Materials, and Chemicals remain from two weeks ago, with Construction replacing Autos. 
<hr>
- COMPANIES -
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/076/763/original/2019-01-27_15-07-37.png?1548569281" class="editor-image img-responsive" data-smartkarma-image-id="76763"></figure>
<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/076/775/original/2019-01-27_16-34-40.png?1548574490" class="editor-image img-responsive" data-smartkarma-image-id="76775"></figure>
Source: Japan Analytics
</div>
COMPANY MOVING AVERAGE OUTLIERS - As with the Market Composite and Sectors, the Moving Average Outlier indicator uses a weighted sum of each company's share price relative to its 5-day, 20-day, 60-day, 120-day and 240-day moving averages. 'Extreme' values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen. 
In the DETAIL section below, we highlight the current top and bottom twenty-five larger capitalisation outliers, as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note. <a href="https://www.smartkarma.com/entities/26722" target="_blank" data-smartkarma-citation="entities:26722:1">UUUM (3990 JP)</a> is currently the most 'extreme' positive outlier, and <a href="https://www.smartkarma.com/entities/20895" target="_blank" data-smartkarma-citation="entities:20895:1">Welcia (3141 JP)</a> the most 'extreme' negative outlier

- MARKET COMPOSITE -

Source: Japan Analytics
SLOW &amp; STEADY RECOVERY - From December 25th's lows of 8% by number and 11% by value, the percentages of Japanese stocks above the weighted sum of moving averages have continued to recover to now 19% by number and 26% by value. Total Market Value has now risen by 11.2% from the Christmas Day low and is overdue a 'breather'.

- SECTORS -


LEGEND: The 'sparklines' show the three-year trend in the weighted percentage above moving average relative to the Market Composite and the 'STDev' column is a measure of the variability of that relative measure. The table also provides averages for the breaks above and breaks below and the positive and negative crossovers.
SECTOR BREAKDOWN - The top six sectors measured by their percentage above the weighted average of 5-240 Days remain domestic and defensive. REITs, Information Technology, Media, Healthcare and Utilities continue from our previous review with Restaurants replacing Transportation. Equally predictable is the bottom half-dozen - Banks, Autos, Metals, Building Materials, and Chemicals remain from two weeks ago, with Construction replacing Autos. 

- COMPANIES -



Source: Japan Analytics

COMPANY MOVING AVERAGE OUTLIERS - As with the Market Composite and Sectors, the Moving Average Outlier indicator uses a weighted sum of each company's share price relative to its 5-day, 20-day, 60-day, 120-day and 240-day moving averages. 'Extreme' values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen. 
In the DETAIL section below, we highlight the current top and bottom twenty-five larger capitalisation outliers, as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note. UUUM (3990 JP) is currently the most 'extreme' positive outlier, and Welcia (3141 JP) the most 'extreme' negative outlier

Japan: Moving Average Outliers - Tech[nical] Rebound

Japan

BIC CAMERA INC. operates electronic retail stores throughout Japan focusing on the Tokyo metropolitan area.  The Company sells audio and video equipments, electrical home appliances and telecommunication equipments.  Bic Camera also runs an Internet shopping site.

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Bic Camera Inc (3048 JP)

Yamada Denki Buyback - Big Impact But Risky

Today after the close, Yamada Denki (9831 JP) announced it would buy back up to 100,000,000 shares for up to ¥50 billion. The announcement is only...

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Consumer electronics retailer K'S Holdings (8282 JP) has had two excellent years by pursuing a policy that its rivals have all but abandoned. It...

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The Activism at TBS - There's a History, And There Is NEW Activity, But Don't Hold Your Breath

Major Japanese broadcaster Tokyo Broadcasting System (9401 JP) has a long history of being a target for wannabe activists. The company has long...

Travis Lundy

🇯🇵 Japan: Moving Average Outliers - PKSHA, SanBio, Goldwin, ZOZO, Drugstores & ASICS

- MARKET COMPOSITE -ALMOST THREE-MONTH HIGH RECOVERY - The bear market rally is now in its second stage, and the market composite is now 14% above...

Campbell Gunn

Japan: Moving Average Outliers - Tech[nical] Rebound

- MARKET COMPOSITE - SLOW & STEADY RECOVERY - From December 25th's lows of 8% by number and 11% by value, the percentages of Japanese stocks...

Campbell Gunn

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