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

TSE Tokyo Price Index TOPIX / Technical Analysis

Our outlook for ex-U.S. markets (MSCI ACWI ex-U.S. index, local currency) remains neutral - bordering on cautious. Our concern stems from the recent pattern of lower highs and continued underperformance relative to MSCI ACWI - remain underweight.  Two bright spots: we are seeing bullish inflections in Japan (TOPIX and Nikkei 225), and India's SENSEX.  We unpack these, and also highlight actionable set ups in our global Communications, and Transportation Sectors.

Our outlook for ex-U.S. markets (MSCI ACWI ex-U.S. index, local currency) remains neutral - bordering on cautious. Our concern stems from the recent pattern of lower highs and continued underperformance relative to MSCI ACWI - remain underweight.  Two bright spots: we are seeing bullish inflections in Japan (TOPIX and Nikkei 225), and India's SENSEX.  We unpack these, and also highlight actionable set ups in our global Communications, and Transportation Sectors.

Global Equity Strategy: Opportunities in Japan and India

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)

1H Earnings season is just around the corner for most Japanese companies and a lot of companies like to revise guidance when they annouce 1H earnings. We thought we would look for companies where consensus estimates and current company guidance is significantly different. <a href="https://www.smartkarma.com/entities/5415" target="_blank" data-smartkarma-citation="entities:5415:1">Nintendo Co Ltd (7974 JP)</a> tops the list with consensus OP 103% above company guidance. <a href="https://www.smartkarma.com/entities/15359" target="_blank" data-smartkarma-citation="entities:15359:1">Ricoh Co Ltd (7752 JP)</a>'s difference is almost as bad with consensus OP 93% above guidance. Other big names that made the list are <a href="https://www.smartkarma.com/entities/8416" target="_blank" data-smartkarma-citation="entities:8416:1">Komatsu</a>…

1H Earnings season is just around the corner for most Japanese companies and a lot of companies like to revise guidance when they annouce 1H earnings. We thought we would look for companies where consensus estimates and current company guidance is significantly different. Nintendo Co Ltd (7974 JP) tops the list with consensus OP 103% above company guidance. Ricoh Co Ltd (7752 JP)'s difference is almost as bad with consensus OP 93% above guidance. Other big names that made the list are Komatsu…

Companies Where Consensus and Company Guidance Are Far Apart.....

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

Although broadcasting is expected to make Y8.2bn in operating profit this year, the industry remains weak and its own viewing ratings are lagging expectations. That said real estate is doing better than expected so it is not impossible that they could make this year’s operating forecast of Y23.5bn. We suspect, however, they will have a small miss. So does the market.The shares are, however, too cheap. The real estate business is worth perhaps Y300bn (applying a cap rate of c 4.5% to the real…

Although broadcasting is expected to make Y8.2bn in operating profit this year, the industry remains weak and its own viewing ratings are lagging expectations. That said real estate is doing better than expected so it is not impossible that they could make this year’s operating forecast of Y23.5bn. We suspect, however, they will have a small miss. So does the market.The shares are, however, too cheap. The real estate business is worth perhaps Y300bn (applying a cap rate of c 4.5% to the real…

Overall this year’s operating profit forecasts (Y23.5bn) appears realistic, perhaps a bit conservative. We value the real estate business at close to Y300bn, the rest of the business, which makes operating profit of about Y13bn, is perhaps worth Y100bn assuming about 10x earnings. There are investments of Y315bn (both listed and unlisted and include Y40bn in Yakult) and there is net debt of about Y40bn. Assuming a 20% haircut on investments gives a value of Y250bn and add this to the above, we…

Overall this year’s operating profit forecasts (Y23.5bn) appears realistic, perhaps a bit conservative. We value the real estate business at close to Y300bn, the rest of the business, which makes operating profit of about Y13bn, is perhaps worth Y100bn assuming about 10x earnings. There are investments of Y315bn (both listed and unlisted and include Y40bn in Yakult) and there is net debt of about Y40bn. Assuming a 20% haircut on investments gives a value of Y250bn and add this to the above, we…

Macroeconomics

Japan's aggregate Net Income margin increased from 2.7% in 2012 to 4.6% in 2016. While this margin expansion is a great thing, asset efficiency (asset turns) is basically flat over the same period.  We went back and compared average net income margins in 2011 - 2013 to 2016 and found that only 4 out of 19 sectors saw a decline in net income margins. For TOPIX 500, aggregate average net income margin from 2011-2013 was 3.2% compared to 4.6% in 2016. At the company level, 74% of TOPIX 500 saw an…

Japan's aggregate Net Income margin increased from 2.7% in 2012 to 4.6% in 2016. While this margin expansion is a great thing, asset efficiency (asset turns) is basically flat over the same period.  We went back and compared average net income margins in 2011 - 2013 to 2016 and found that only 4 out of 19 sectors saw a decline in net income margins. For TOPIX 500, aggregate average net income margin from 2011-2013 was 3.2% compared to 4.6% in 2016. At the company level, 74% of TOPIX 500 saw an…

Margins Expanding in Japan but Asset Efficiency Is Not Improving....

Japan

FUJI MEDIA HOLDINGS, INC., a member of the Fuji-Sankei Group, produces and broadcasts a variety of television programs and sells commercial spots through a network system.  The Company is advancing into digital satellite broadcasting.

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Fuji Media Holdings (4676 JP)

Global Equity Strategy: Opportunities in Japan and India

Our outlook for ex-U.S. markets (MSCI ACWI ex-U.S. index, local currency) remains neutral - bordering on cautious. Our concern stems from the...

Vermilion Research

Companies Where Consensus and Company Guidance Are Far Apart.....

1H Earnings season is just around the corner for most Japanese companies and a lot of companies like to revise guidance when they annouce 1H...

Custom Products Group

Fuji Media (4676) Far Too Cheap Here

Although broadcasting is expected to make Y8.2bn in operating profit this year, the industry remains weak and its own viewing ratings are lagging...

Pearl Hill Advisors

Fuji Media (4676) - Remains Undervalued

Overall this year’s operating profit forecasts (Y23.5bn) appears realistic, perhaps a bit conservative. We value the real estate business at close...

Pearl Hill Advisors

Margins Expanding in Japan but Asset Efficiency Is Not Improving....

Japan's aggregate Net Income margin increased from 2.7% in 2012 to 4.6% in 2016. While this margin expansion is a great thing, asset efficiency...

Custom Products Group

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