'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

INTRODUCTION - Following on from our previous Insights covering the Market Composite, Sector and Peer Group Aggregate Results and Results &amp; Revision Scores, this Insight will look at the cap-weighted Summer Results &amp; Revision Scores for the 682 companies in Japan with a market capitalisation of over ¥100 billion.As an introduction, we review below the best and worst-twenty companies from this group in terms of cumulative Results &amp; Revision Score, Volatility and Volatility-Adjusted Scores over the last fourteen years.SCORING METHODOLOGY - For newcomers to these Insights, our Results &amp; Revision Scores, Results Scores, and Forecast/Revisions Scores provide a standardised 'scoring' of the trend and momentum in both results and initial forecasts/revisions for every listed Japanese company. The data series, which starts in 2008, covers over 160,000 quarterly results and 120,000 initial forecasts and subsequent forecast revisions. <ul><li>Results Scores are calculated using the most recent eight quarters of data for revenues, operating income and operating margin and, for each, measure the rate, degree, and consistency of change. The score has a maximum of +30 and a minimum of -30 for each period. In cases where the data is insufficient, incomplete or non-comparable data, the score defaults to zero. Usually, 25% of Japanese company quarterly earnings show losses, and therefore scoring methodology is more revealing of trends than percentage changes.</li></ul><ul>
<li>The Forecast/Revision Score is based on both Annual and Interim period forecasts and compares changes from previous forecasts as well as against the trailing twelve-month (TTM) or past first-half results, with annual forecasts being double-weighted. This score also has a maximum of +30 and a minimum of -30 for each period.</li>
<li>The Results &amp; Revision Score is an average of the Results Scores and the Forecasts/Revision Score and is used to sort the universe by score and change in score in the tables below.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/032/original/2019-08-27_10-20-15.png?1566868845" class="editor-image img-responsive" data-smartkarma-image-id="97032"></figure><div class="content-caption">Source: Japan Analytics</div>CUMULATIVE TOP 20 - Only one traditional manufacturing company, technology hardware specialist <a href="https://www.smartkarma.com/entities/japan-material-co-ltd" target="_blank" data-smartkarma-citation="entities:19248:1" rel="noopener">Japan Material (6055 JP)</a>, makes the list of the most consistent scorers 2006. As was the case with our Peer Groups, the Retail (4 entrants) and Internet (7) Sectors make up the majority. Sports club operator <a href="https://www.smartkarma.com/entities/tosho-co-ltd" target="_blank" data-smartkarma-citation="entities:4037:1" rel="noopener">Tosho (8920 JP)</a>, having had only one negative quarter since listing in 2004, while larger peer <a href="https://www.smartkarma.com/entities/koshidaka-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14191:1" rel="noopener">Koshidaka (2157 JP)</a> ranks eleventh. <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a>is the best retailer, <a href="https://www.smartkarma.com/entities/obic-co-ltd" target="_blank" data-smartkarma-citation="entities:1273:1" rel="noopener">Obic (4684 JP)</a>the best Commerical Services company, while <a href="https://www.smartkarma.com/entities/asahi-intecc-co-ltd" target="_blank" data-smartkarma-citation="entities:15915:1" rel="noopener">Asahi Intecc (7747 JP)</a> is the sole Healthcare stocks. Of those that have lost ground in recent years, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent (4751 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> are the standouts.   <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/033/original/2019-08-27_10-25-56.png?1566869198" class="editor-image img-responsive" data-smartkarma-image-id="97033"></figure><div class="content-caption">Source: Japan Analytics</div>CUMULATIVE BOTTOM 20 - The worst businesses in Japan over the last fifteen years in terms of business performance have been clustered in finance - <a href="https://www.smartkarma.com/entities/kabu-com-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:17019:1" rel="noopener">Kabu.Com (8703 JP)</a>, the <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a> 'trio' and a quintet of Regional Banks. The two failing Internet business models of <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">mixi (2121 JP)</a>and <a href="https://www.smartkarma.com/entities/gree-inc" target="_blank" data-smartkarma-citation="entities:17135:1" rel="noopener">Gree (3632 JP)</a> are both within the bottom five while, surprisingly, Healthcare has three entrants, although <a href="https://www.smartkarma.com/entities/ono-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:8979:1" rel="noopener">Ono Pharmaceutical (4528 JP)</a>has staged a recovery since bottoming in 2015. <a href="https://www.smartkarma.com/entities/duskin-co-ltd" target="_blank" data-smartkarma-citation="entities:18206:1" rel="noopener">Duskin (4665 JP)</a> is the only Services company on the list, while those looking for a 'dark-horse' in tech have <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC (6701 JP)</a> to ponder.<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/038/original/2019-08-27_10-36-34.png?1566869826" class="editor-image img-responsive" data-smartkarma-image-id="97038"></figure>Source: Japan Analytics
</div>LEAST VOLATILE - The least volatile Scores are, as would be expected clustered around the provision of food, personal and household products with Drugstores being the clear 'leader' with six of the top-twenty companies. Freight operator<a href="https://www.smartkarma.com/entities/senko-co-ltd" target="_blank" data-smartkarma-citation="entities:5287:1" rel="noopener">Senko (9069 JP)</a>is an unexpected 'second', while Chemical sector business-aggregator <a href="https://www.smartkarma.com/entities/air-water-inc" target="_blank" data-smartkarma-citation="entities:18073:1" rel="noopener">Air Water (4088 JP)</a>is the leading manufacturer. Real Estate and Non-Life Insurance has two entrants each, while highway maintenance company <a href="https://www.smartkarma.com/entities/sho-bond-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:3754:1" rel="noopener">Sho Bond (1414 JP)</a>is the only Construction company.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/042/original/2019-08-27_10-43-55.png?1566870260" class="editor-image img-responsive" data-smartkarma-image-id="97042"></figure><div class="content-caption">Source: Japan Analytics</div>MOST VOLATILITY - As might be expected, Machinery (6), Technology (7) and Securities (3) companies dominate the list, with only <a href="https://www.smartkarma.com/entities/gungho-online-entertainment" target="_blank" data-smartkarma-citation="entities:6604:1" rel="noopener">Gungho Online Entertainment (3765 JP)</a>, <a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a>, <a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a>, and <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei (4565 JP)</a>being the only 'outsiders'. Of the manufacturing cyclicals, we would note that <a href="https://www.smartkarma.com/entities/okuma-corp" target="_blank" data-smartkarma-citation="entities:6688:1" rel="noopener">Okuma (6103 JP)</a>, <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a>, <a href="https://www.smartkarma.com/entities/komatsu-ltd" target="_blank" data-smartkarma-citation="entities:8416:1" rel="noopener">Komatsu (6301 JP)</a>, and <a href="https://www.smartkarma.com/entities/tadano-ltd" target="_blank" data-smartkarma-citation="entities:1204:1" rel="noopener">Tadano (6395 JP)</a>are slower to 'turn' in this cycle compared to previous ones and that<a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a> is also 'extended' in its current cycle.     <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/043/original/2019-08-27_10-57-47.png?1566871097" class="editor-image img-responsive" data-smartkarma-image-id="97043"></figure><div class="content-caption">Source: Japan Analytics</div>VOLATILITY-ADJUSTED TOP 20 - The best volatility-adjusted performance in large-cap Japan is in the Retail Sector with eleven entrants, of which five are Drugstores. The two sports clubs remain, as does OBIC, but only <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">Monotaro (3064 JP)</a>remains from the Internet Sector. Relocation services specialist <a href="https://www.smartkarma.com/entities/relo-group-inc" target="_blank" data-smartkarma-citation="entities:13924:1" rel="noopener">Relo (8876 JP)</a> ranks fifth, while <a href="https://www.smartkarma.com/entities/nihon-m-a-center-inc" target="_blank" data-smartkarma-citation="entities:17616:1" rel="noopener">Nihon M&amp;A Center (2127 JP)</a> is the only financial-related company.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/044/original/2019-08-27_11-07-36.png?1566871680" class="editor-image img-responsive" data-smartkarma-image-id="97044"></figure><div class="content-caption">Source: Japan Analytics</div>VOLATILITY-ADJUSTED BOTTOM 15 - The performance 'hall-of-shame' has three Securities Brokers, four each from the Internet, Machinery and Technology Sectors. Two of the Machinery companies, <a href="https://www.smartkarma.com/entities/sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:12385:1" rel="noopener">Sankyo Co Ltd (6417 JP)</a>, and<a href="https://www.smartkarma.com/entities/universal-entertainment-corp" target="_blank" data-smartkarma-citation="entities:13915:1" rel="noopener">Universal Entertainment (6425 JP)</a>are pachinko/pachislot machine manufacturers. <div class="content-caption"></div><div class="content-highlight">In the DETAIL section below, we list the current top and bottom twenty Peer Groups ranked by Results &amp; Revision Score and the top and bottom twenty most-changed over the last three months as well the most optimistic (Forecasts &gt; TTM results) and most pessimistic (TTM results &gt; Forecasts).  </div>

INTRODUCTION - Following on from our previous Insights covering the Market Composite, Sector and Peer Group Aggregate Results and Results &amp; Revision Scores, this Insight will look at the cap-weighted Summer Results &amp; Revision Scores for the 682 companies in Japan with a market capitalisation of over ¥100 billion.As an introduction, we review below the best and worst-twenty companies from this group in terms of cumulative Results &amp; Revision Score, Volatility and Volatility-Adjusted Scores over the last fourteen years.SCORING METHODOLOGY - For newcomers to these Insights, our Results &amp; Revision Scores, Results Scores, and Forecast/Revisions Scores provide a standardised 'scoring' of the trend and momentum in both results and initial forecasts/revisions for every listed Japanese company. The data series, which starts in 2008, covers over 160,000 quarterly results and 120,000 initial forecasts and subsequent forecast revisions. Results Scores are calculated using the most recent eight quarters of data for revenues, operating income and operating margin and, for each, measure the rate, degree, and consistency of change. The score has a maximum of +30 and a minimum of -30 for each period. In cases where the data is insufficient, incomplete or non-comparable data, the score defaults to zero. Usually, 25% of Japanese company quarterly earnings show losses, and therefore scoring methodology is more revealing of trends than percentage changes.
The Forecast/Revision Score is based on both Annual and Interim period forecasts and compares changes from previous forecasts as well as against the trailing twelve-month (TTM) or past first-half results, with annual forecasts being double-weighted. This score also has a maximum of +30 and a minimum of -30 for each period.
The Results &amp; Revision Score is an average of the Results Scores and the Forecasts/Revision Score and is used to sort the universe by score and change in score in the tables below.
Source: Japan AnalyticsCUMULATIVE TOP 20 - Only one traditional manufacturing company, technology hardware specialist Japan Material (6055 JP), makes the list of the most consistent scorers 2006. As was the case with our Peer Groups, the Retail (4 entrants) and Internet (7) Sectors make up the majority. Sports club operator Tosho (8920 JP), having had only one negative quarter since listing in 2004, while larger peer Koshidaka (2157 JP) ranks eleventh. Nitori (9843 JP)is the best retailer, Obic (4684 JP)the best Commerical Services company, while Asahi Intecc (7747 JP) is the sole Healthcare stocks. Of those that have lost ground in recent years, CyberAgent (4751 JP) and ZOZO Inc (3092 JP) are the standouts.   Source: Japan AnalyticsCUMULATIVE BOTTOM 20 - The worst businesses in Japan over the last fifteen years in terms of business performance have been clustered in finance - Kabu.Com (8703 JP), the Japan Post Holdings (6178 JP) 'trio' and a quintet of Regional Banks. The two failing Internet business models of mixi (2121 JP)and Gree (3632 JP) are both within the bottom five while, surprisingly, Healthcare has three entrants, although Ono Pharmaceutical (4528 JP)has staged a recovery since bottoming in 2015. Duskin (4665 JP) is the only Services company on the list, while those looking for a 'dark-horse' in tech have NEC (6701 JP) to ponder.
Source: Japan Analytics
LEAST VOLATILE - The least volatile Scores are, as would be expected clustered around the provision of food, personal and household products with Drugstores being the clear 'leader' with six of the top-twenty companies. Freight operatorSenko (9069 JP)is an unexpected 'second', while Chemical sector business-aggregator Air Water (4088 JP)is the leading manufacturer. Real Estate and Non-Life Insurance has two entrants each, while highway maintenance company Sho Bond (1414 JP)is the only Construction company.Source: Japan AnalyticsMOST VOLATILITY - As might be expected, Machinery (6), Technology (7) and Securities (3) companies dominate the list, with only Gungho Online Entertainment (3765 JP), DeNA (2432 JP), Nintendo (7974 JP), and Sosei (4565 JP)being the only 'outsiders'. Of the manufacturing cyclicals, we would note that Okuma (6103 JP), Taiyo Yuden (6976 JP), Komatsu (6301 JP), and Tadano (6395 JP)are slower to 'turn' in this cycle compared to previous ones and thatNintendo (7974 JP) is also 'extended' in its current cycle.     Source: Japan AnalyticsVOLATILITY-ADJUSTED TOP 20 - The best volatility-adjusted performance in large-cap Japan is in the Retail Sector with eleven entrants, of which five are Drugstores. The two sports clubs remain, as does OBIC, but only Monotaro (3064 JP)remains from the Internet Sector. Relocation services specialist Relo (8876 JP) ranks fifth, while Nihon M&amp;A Center (2127 JP) is the only financial-related company.Source: Japan AnalyticsVOLATILITY-ADJUSTED BOTTOM 15 - The performance 'hall-of-shame' has three Securities Brokers, four each from the Internet, Machinery and Technology Sectors. Two of the Machinery companies, Sankyo Co Ltd (6417 JP), andUniversal Entertainment (6425 JP)are pachinko/pachislot machine manufacturers. In the DETAIL section below, we list the current top and bottom twenty Peer Groups ranked by Results &amp; Revision Score and the top and bottom twenty most-changed over the last three months as well the most optimistic (Forecasts &gt; TTM results) and most pessimistic (TTM results &gt; Forecasts).  

🇯🇵 JAPAN • Summer Results & Revision Scores - Large Caps

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

we believe global equities remain in a state of purgatory and consolidation is likely to continue as several major indexes approach logical resistance... see charts below and page 2. With global equity markets generally moving sideways, we want to stick with themes that are working -- we highlight actionable ideas in the following areas: Australian Banks, European/UK Banks and Autos &amp; Parts, Global Health Care stocks, and Japanese Manufacturing stocks.

we believe global equities remain in a state of purgatory and consolidation is likely to continue as several major indexes approach logical resistance... see charts below and page 2. With global equity markets generally moving sideways, we want to stick with themes that are working -- we highlight actionable ideas in the following areas: Australian Banks, European/UK Banks and Autos &amp; Parts, Global Health Care stocks, and Japanese Manufacturing stocks.

Global Equities Nearing Potential Resistance

Japan

DUSKIN CO., LTD. sells and leases cleaning equipment and commodity. The Company operates food franchise chain as well.

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Duskin Co Ltd (4665 JP)

🇯🇵 JAPAN • Summer Results & Revision Scores - Large Caps

INTRODUCTION - Following on from our previous Insights covering the Market Composite, Sector and Peer Group Aggregate Results and Results &...

Campbell Gunn

Global Equities Nearing Potential Resistance

we believe global equities remain in a state of purgatory and consolidation is likely to continue as several major indexes approach logical...

Vermilion Research

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