'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

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are put on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes only a few months.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/661/original/2019-09-02_10-54-04.png?1567389310" class="editor-image img-responsive" data-smartkarma-image-id="97661"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/664/original/2019-09-02_10-56-43.png?1567389423" class="editor-image img-responsive" data-smartkarma-image-id="97664"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/676/original/2019-09-02_11-21-41.png?1567390923" class="editor-image img-responsive" data-smartkarma-image-id="97676"></figure><div class="content-caption">Source: Japan Analytics</div>OUTLIER TRENDS - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish and the crossovers between the numbers of each offering market timing signals.  The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble' when the combined total of Overbought and Oversold percentages reached over three times the current level.. We attribute some of the market's distortions to the Bank of Japan's market activities and the increase in algorithmic trading. Whatever the cause, repeating the 2000 tech bubble playbook is unlikely to end well.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/672/original/2019-09-02_11-13-07.png?1567390420" class="editor-image img-responsive" data-smartkarma-image-id="97672"></figure><div class="content-caption">Source: Japan Analytics</div>NEGATIVE 'SPREADS' - On a daily closing basis, the Oversold outlier percentage is currently 3.83%, having peaked at 4.06% on 29th August. The Overbought outlier percentage peaked at 2.73% on 26th August and is now at 2.45%. The negative 'spread' is currently -1.38%, having reached -1.59% on 29th August which compares with -1.34 at the recent market low point on December 25th 2018, and -1.26 on 29th January. In this distorted and polarised market, the winners keep on winning, and the losers keep on losing, but the Total Market Value is now out of 'sync' with the spread and should correct to the downside.<hr>• SECTORS •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/097/677/original/2019-09-02_11-30-46.png?1567391475" class="editor-image img-responsive" data-smartkarma-image-id="97677"></figure><div class="content-caption">Source: Japan Analytics</div>SECTOR 28-YEAR TIMELINE - The 28-year Sector Relative Price Score Timeline chronicles the periodic extremes of both Overbought and Oversold Sectors. Only seventeen Sectors have been Overbought during this period for a total of 546 months of which half were before 2001. The average Overbought persistence is 4.3 months or 3.4 months excluding the Internet Sector.  Only fourteen Sectors have been Oversold since 1992 for a total of 243 months of which 55% were before 2001. The average Oversold persistence is 5.7 months although this has risen to 7.5 months since 2001. Currently, five Sectors are Overbought - Consumer Services, Healthcare, Other Consumer Products, Information Technology, and Other Commercial Products. Four Sectors are Oversold - Banks, Multi-Industry, Utilities, and Energy.    <div class="content-highlight">In the DETAIL section below, we provide an update on recent Sector and Peer Group trends. A second Insight will follow looking at the September Relative Price Scores for Companies. </div>

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are put on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes only a few months.Source: Japan AnalyticsOUTLIER TRENDS - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish and the crossovers between the numbers of each offering market timing signals.  The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble' when the combined total of Overbought and Oversold percentages reached over three times the current level.. We attribute some of the market's distortions to the Bank of Japan's market activities and the increase in algorithmic trading. Whatever the cause, repeating the 2000 tech bubble playbook is unlikely to end well.Source: Japan AnalyticsNEGATIVE 'SPREADS' - On a daily closing basis, the Oversold outlier percentage is currently 3.83%, having peaked at 4.06% on 29th August. The Overbought outlier percentage peaked at 2.73% on 26th August and is now at 2.45%. The negative 'spread' is currently -1.38%, having reached -1.59% on 29th August which compares with -1.34 at the recent market low point on December 25th 2018, and -1.26 on 29th January. In this distorted and polarised market, the winners keep on winning, and the losers keep on losing, but the Total Market Value is now out of 'sync' with the spread and should correct to the downside.• SECTORS •Source: Japan AnalyticsSECTOR 28-YEAR TIMELINE - The 28-year Sector Relative Price Score Timeline chronicles the periodic extremes of both Overbought and Oversold Sectors. Only seventeen Sectors have been Overbought during this period for a total of 546 months of which half were before 2001. The average Overbought persistence is 4.3 months or 3.4 months excluding the Internet Sector.  Only fourteen Sectors have been Oversold since 1992 for a total of 243 months of which 55% were before 2001. The average Oversold persistence is 5.7 months although this has risen to 7.5 months since 2001. Currently, five Sectors are Overbought - Consumer Services, Healthcare, Other Consumer Products, Information Technology, and Other Commercial Products. Four Sectors are Oversold - Banks, Multi-Industry, Utilities, and Energy.    In the DETAIL section below, we provide an update on recent Sector and Peer Group trends. A second Insight will follow looking at the September Relative Price Scores for Companies. 

🇯🇵 Japan • September Relative Price Scores - Life at the Poles Part 1

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/044/original/2019-06-23_11-15-52.png?1561256166" class="editor-image img-responsive" data-smartkarma-image-id="91044"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/045/original/2019-06-23_11-21-43.png?1561256515" class="editor-image img-responsive" data-smartkarma-image-id="91045"></figure>
Source: Japan Analytics
</div>RESILIENCE - Japanese equities have risen by 2.9% since the low of 4th June. In US dollar terms, the gain is 3.7%. Over the last two weeks, the gains are 0.7% and 1.6%, respectively. For the previous twelve months, the equity market has moved in almost perfect 'sync' with the US dollar/Japanese Yen exchange rate. This month's divergence is unusual, and it remains to be seen when, how, and if the gap will be closed. The cross rate is within ¥2.6 of the high points of the last two years. Barring any military sparring in the Middle East, any weakness in the Yen from current levels will be supportive of the equity market.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/046/original/2019-06-23_11-51-30.png?1561258305" class="editor-image img-responsive" data-smartkarma-image-id="91046"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/047/original/2019-06-23_11-51-58.png?1561258329" class="editor-image img-responsive" data-smartkarma-image-id="91047"></figure><div class="content-caption">Source: Japan Analytics</div>RSI &amp; TORAKU - Both the 5-day Relative Strength Index and the 25-Day Toraku Index have recovered to the middle of their normal range and suggest quieter days ahead, currency moves permitting.<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/065/original/2019-06-23_12-26-08.png?1561260389" class="editor-image img-responsive" data-smartkarma-image-id="91065"></figure> Source: Japan Analytics</div>ABSOLUTE BREADTH - Our Absolute Breadth Index reached a new low for the year on Friday, but is well above the 0.5 level that would indicate a buying opportunity.<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/069/original/2019-06-23_12-30-22.png?1561260645" class="editor-image img-responsive" data-smartkarma-image-id="91069"></figure> Source: Japan Analytics</div>VOLUME SCORE TIMELINE - Volumes remains concentrated in the Internet, Information Technology, REITs, Restaurants, and Energy Sectors, the Materials, Transportation, Utilities, and Multi-Industry Sectors are the volume laggards.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/100/original/2019-06-23_13-32-38.png?1561264370" class="editor-image img-responsive" data-smartkarma-image-id="91100"></figure><div class="content-caption">Source: Japan Analytics</div>VALUATION - The quarterly results for companies with January, April, July and October year-ends are now in, but have had little impact on the 'aggregates'. The trailing-twelve-month (TTM) PER is 14.4, and the Forecast PER is 13.9 - attractive relative to recent history but not at bargain-basement levels. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/091/102/original/2019-06-23_13-44-36.png?1561265086" class="editor-image img-responsive" data-smartkarma-image-id="91102"></figure><div class="content-caption">Source: Japan Analytics</div>RESULTS &amp; REVISION SCORES - Our scoring of aggregate Results and Revisions has also not seen any significant changes, although the trends are still downwards, especially for Interim Revisions.<div class="content-highlight">In the DETAIL section below, we will review Sector performance, scores and valuation, Company Results &amp; Revisions and stock performance over the previous two weeks, as well as adding some brief comments on <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)</a>, <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha (3391 JP)</a>, <a href="https://www.smartkarma.com/entities/pigeon-corp" target="_blank" data-smartkarma-citation="entities:3294:1" rel="noopener">Pigeon (7956 JP), </a><a href="https://www.smartkarma.com/entities/sanbio-co-ltd" target="_blank" data-smartkarma-citation="entities:24540:1" rel="noopener">SanBio (4592 JP)</a>, <a href="https://www.smartkarma.com/entities/ain-pharmaciez-inc" target="_blank" data-smartkarma-citation="entities:9313:1" rel="noopener">Ain (9627 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-seal-international-inc" target="_blank" data-smartkarma-citation="entities:8723:1" rel="noopener">Fuji Seal (7864 JP)</a>, <a href="https://www.smartkarma.com/entities/fanuc-corp" target="_blank" data-smartkarma-citation="entities:752:1" rel="noopener">Fanuc (6954 JP)</a>, <a href="https://www.smartkarma.com/entities/leopalace21-corp" target="_blank" data-smartkarma-citation="entities:8244:1" rel="noopener">Leopalace21 (8848 JP)</a>, and <a href="https://www.smartkarma.com/entities/obic-co-ltd" target="_blank" data-smartkarma-citation="entities:1273:1" rel="noopener">Obic (4684 JP)</a>.​ ​ ​ ​​ ​ ​ ​</div>




Source: Japan Analytics
RESILIENCE - Japanese equities have risen by 2.9% since the low of 4th June. In US dollar terms, the gain is 3.7%. Over the last two weeks, the gains are 0.7% and 1.6%, respectively. For the previous twelve months, the equity market has moved in almost perfect 'sync' with the US dollar/Japanese Yen exchange rate. This month's divergence is unusual, and it remains to be seen when, how, and if the gap will be closed. The cross rate is within ¥2.6 of the high points of the last two years. Barring any military sparring in the Middle East, any weakness in the Yen from current levels will be supportive of the equity market.Source: Japan AnalyticsRSI &amp; TORAKU - Both the 5-day Relative Strength Index and the 25-Day Toraku Index have recovered to the middle of their normal range and suggest quieter days ahead, currency moves permitting.
 Source: Japan AnalyticsABSOLUTE BREADTH - Our Absolute Breadth Index reached a new low for the year on Friday, but is well above the 0.5 level that would indicate a buying opportunity.
 Source: Japan AnalyticsVOLUME SCORE TIMELINE - Volumes remains concentrated in the Internet, Information Technology, REITs, Restaurants, and Energy Sectors, the Materials, Transportation, Utilities, and Multi-Industry Sectors are the volume laggards.Source: Japan AnalyticsVALUATION - The quarterly results for companies with January, April, July and October year-ends are now in, but have had little impact on the 'aggregates'. The trailing-twelve-month (TTM) PER is 14.4, and the Forecast PER is 13.9 - attractive relative to recent history but not at bargain-basement levels. Source: Japan AnalyticsRESULTS &amp; REVISION SCORES - Our scoring of aggregate Results and Revisions has also not seen any significant changes, although the trends are still downwards, especially for Interim Revisions.In the DETAIL section below, we will review Sector performance, scores and valuation, Company Results &amp; Revisions and stock performance over the previous two weeks, as well as adding some brief comments on Kobe Bussan (3038 JP), Tsuruha (3391 JP), Pigeon (7956 JP), SanBio (4592 JP), Ain (9627 JP), Fuji Seal (7864 JP), Fanuc (6954 JP), Leopalace21 (8848 JP), and Obic (4684 JP).​ ​ ​ ​​ ​ ​ ​

🇯🇵 JAPAN • Market Update - Resilience

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

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add exposure. In our June International Strategy, we highlight various themes which lead to this belief, along with areas of the market where we see actionable opportunities within our favorite Groups, spanning the Consumer Staples, Technology, Consumer Discretionary, Services, Health Care, and Financial Sectors.

Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are put on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes only a few months.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/089/981/original/2019-06-10_17-53-34.png?1560156828" class="editor-image img-responsive" data-smartkarma-image-id="89981"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/089/982/original/2019-06-10_17-58-02.png?1560157092" class="editor-image img-responsive" data-smartkarma-image-id="89982"></figure>Source: Japan Analytics
</div>OUTLIER TRENDS - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish and the crossovers between the numbers of each offering market timing signals.  TECH BUBBLE PLAYBOOK - The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble'. We attribute some of the market's distortions to the Bank of Japan's market activities and the increase in algorithmic trading. Whatever the cause, repeating the 2000 tech bubble playbook is unlikely to end well. NEGATIVE 'SPREADS' - On a daily closing basis, the Oversold outlier percentage is currently 3.31%, having peaked at 3.51% on 17th May. The Overbought outlier percentage peaked at 2.52% on 27th May and is now at 2.37%. The negative 'spread' is currently -0.94%, having reached -1.22% on 14th May compared to -1.34 on December 25th 2018, and -1.26 on 29th January. In this distorted and polarised market, the winners keep on winning, and the losers keep on losing.  <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/089/985/original/2019-06-10_18-46-51.png?1560160026" class="editor-image img-responsive" data-smartkarma-image-id="89985"></figure><div class="content-caption">Source: Japan Analytics</div>MARKET TIMING - Using the crossover from Net Overbought to Net Oversold as a market timing indicator over the last two decades has produced reasonably good results.  The most recent monthly closing signal was generated in January when the total market value was ¥634t, 1.9% above the current level.<hr>• SECTORS •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/089/987/original/2019-06-10_19-30-41.png?1560162668" class="editor-image img-responsive" data-smartkarma-image-id="89987"></figure><div class="content-caption">Source: Japan Analytics</div>SECTOR 28-YEAR TIMELINE - The 28-year Sector Relative Price Score Timeline chronicles the periodic extremes of both Overbought and Oversold Sectors. Only seventeen Sectors have been Overbought during this period for a total of 546 months of which half were before 2001. The average Overbought persistence is 4.3 months or 3.4 months excluding the Internet Sector.  Only fourteen Sectors have been Oversold since 1992 for a total of 243 months of which 55% were before 2001. The average Oversold persistence is 5.7 months although this has risen to 7.5 months since 2001. Currently, five Sectors are Overbought - Consumer Services, Information Technology, Healthcare Other Consumer Products, and Healthcare -  and two Sectors are Oversold - Banks and Utilities.    <div class="content-highlight">In the DETAIL section below, we provide an update on recent Sector and Peer Group trends and make some specific recommendations. A second Insight will follow looking at the Relative Price Scores for Companies. </div>

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are put on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company data is cap-weight-aggregated into 328 Peer Group and 30 Sector Relative Price Scores. Outlier thresholds are set at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors. These thresholds equate with the top and bottom first-to-second percentiles of historical observations from which mean reversion normally takes only a few months.
Source: Japan Analytics
OUTLIER TRENDS - In the past, increases in the percentage of companies that are either Overbought or Oversold has been a useful indicator of market trends with a rising number of Overbought outliers being bullish and an increasing number of Oversold outliers being bearish and the crossovers between the numbers of each offering market timing signals.  TECH BUBBLE PLAYBOOK - The current situation where both sets of outliers are rising has only occurred once before in the last 30 years - in 1999/2000 shortly before the peak of the 'tech bubble'. We attribute some of the market's distortions to the Bank of Japan's market activities and the increase in algorithmic trading. Whatever the cause, repeating the 2000 tech bubble playbook is unlikely to end well. NEGATIVE 'SPREADS' - On a daily closing basis, the Oversold outlier percentage is currently 3.31%, having peaked at 3.51% on 17th May. The Overbought outlier percentage peaked at 2.52% on 27th May and is now at 2.37%. The negative 'spread' is currently -0.94%, having reached -1.22% on 14th May compared to -1.34 on December 25th 2018, and -1.26 on 29th January. In this distorted and polarised market, the winners keep on winning, and the losers keep on losing.  Source: Japan AnalyticsMARKET TIMING - Using the crossover from Net Overbought to Net Oversold as a market timing indicator over the last two decades has produced reasonably good results.  The most recent monthly closing signal was generated in January when the total market value was ¥634t, 1.9% above the current level.• SECTORS •Source: Japan AnalyticsSECTOR 28-YEAR TIMELINE - The 28-year Sector Relative Price Score Timeline chronicles the periodic extremes of both Overbought and Oversold Sectors. Only seventeen Sectors have been Overbought during this period for a total of 546 months of which half were before 2001. The average Overbought persistence is 4.3 months or 3.4 months excluding the Internet Sector.  Only fourteen Sectors have been Oversold since 1992 for a total of 243 months of which 55% were before 2001. The average Oversold persistence is 5.7 months although this has risen to 7.5 months since 2001. Currently, five Sectors are Overbought - Consumer Services, Information Technology, Healthcare Other Consumer Products, and Healthcare -  and two Sectors are Oversold - Banks and Utilities.    In the DETAIL section below, we provide an update on recent Sector and Peer Group trends and make some specific recommendations. A second Insight will follow looking at the Relative Price Scores for Companies. 

🇯🇵 Japan • June Relative Price Scores: Market, Sectors & Peer Groups - More of The Same

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/182/original/2019-04-29_12-24-09.png?1556508262" class="editor-image img-responsive" data-smartkarma-image-id="86182"></figure>Source: Japan Analytics
</div>EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of this 76 % have been annual results for the fiscal year ended March 2019.  Also, there have been 328 initial forecasts for the year to March 2020, 227 initial interim forecasts and 228 intra-year revisions. With the long holiday break, there will be an avalanche of announcements from the 7th May onwards. In this Insight, we shall look at the trends apparent in the results so far released.  In the last month, our Market Composite trailing-twelve-month (TTM) data series is unchanged for Operating Income, while Net Income has increased by ¥0.2t. With 13% of March-year-end companies have issued FY2020 forecasts, aggregate forecast Operating Income is ¥0.7t lower and is in line with TTM Operating Income. Forecast Net Income is ¥0.6 lower and is 4% below TTM Net Income. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/411/original/2019-04-30_13-26-24.png?1556598396" class="editor-image img-responsive" data-smartkarma-image-id="86411"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/412/original/File%202019-04-30%2013%2010%2017.jpeg?1556598417" class="editor-image img-responsive" data-smartkarma-image-id="86412"></figure><div class="content-caption">Source: Japan Analytics, Pictet Asset Management</div>MARGIN SLIPPAGE - With revenues remaining relatively robust, margins are declining fast that at any time since 2016. The forecast operating margin is now 42 basis points below the 2018 peak level, while the slippage in net margins is 78 basis points. Although the sample is not the same, to IBES consensus estimates have current downtrend bottoming out in the second half of the year with net margins recovering to 6.6% in 2021. We consider this overly optimistic. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/187/original/2019-04-29_12-32-53.png?1556508784" class="editor-image img-responsive" data-smartkarma-image-id="86187"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/190/original/2019-04-29_12-51-24.png?1556509893" class="editor-image img-responsive" data-smartkarma-image-id="86190"></figure>Source: Japan Analytics
</div>RESULTS &amp; REVISION SCORES - Our scoring methodology for results and forecasts/revisions incorporates rates of change and other momentum factors and has historically provided a better fit with changes in aggregate market value. Although the Market Composite Results Score has remained stable in the last week at 2.21, we expect the score to end this results 'season' closer to zero as indicated by the trend in the Forecast/Revision Score. The latter has declined for six quarters in a row and the current quarter will make it seven. Although our data series only covers the last forty quarters and is perhaps too short for generalisations, it would be unusual for the Forecasts/Revision Score series to have an eighth down quarter in a row. Perhaps the market's robust recovery from the Christmas Day low is anticipating such an outcome. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/193/original/2019-04-29_13-17-03.png?1556511439" class="editor-image img-responsive" data-smartkarma-image-id="86193"></figure><div class="content-caption">Source: Japan Analytics</div>USDJPY NEUTRAL - In the past, one of the principal drivers of both scores has been changes in the US dollar/Yen exchange rate. The chart above merges both scores to create a cleaner timeline, and key turning points in <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1">JUSDJPY CURNCY</a> highlighted. With the currency cross trading in a narrow range, there is little support or stimulus in the next six months. However, any sustained weakness in the Yen, such as occurred from September 2016, will be another confirmation that a cycle low has been reached. <div class="content-highlight">In the DETAIL section below, we update our  Sector Results &amp; Revision Scores and look at the best and worst large-cap company results over the seven trading days.</div>


Source: Japan Analytics
EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of this 76 % have been annual results for the fiscal year ended March 2019.  Also, there have been 328 initial forecasts for the year to March 2020, 227 initial interim forecasts and 228 intra-year revisions. With the long holiday break, there will be an avalanche of announcements from the 7th May onwards. In this Insight, we shall look at the trends apparent in the results so far released.  In the last month, our Market Composite trailing-twelve-month (TTM) data series is unchanged for Operating Income, while Net Income has increased by ¥0.2t. With 13% of March-year-end companies have issued FY2020 forecasts, aggregate forecast Operating Income is ¥0.7t lower and is in line with TTM Operating Income. Forecast Net Income is ¥0.6 lower and is 4% below TTM Net Income. Source: Japan Analytics, Pictet Asset ManagementMARGIN SLIPPAGE - With revenues remaining relatively robust, margins are declining fast that at any time since 2016. The forecast operating margin is now 42 basis points below the 2018 peak level, while the slippage in net margins is 78 basis points. Although the sample is not the same, to IBES consensus estimates have current downtrend bottoming out in the second half of the year with net margins recovering to 6.6% in 2021. We consider this overly optimistic. 
Source: Japan Analytics
RESULTS &amp; REVISION SCORES - Our scoring methodology for results and forecasts/revisions incorporates rates of change and other momentum factors and has historically provided a better fit with changes in aggregate market value. Although the Market Composite Results Score has remained stable in the last week at 2.21, we expect the score to end this results 'season' closer to zero as indicated by the trend in the Forecast/Revision Score. The latter has declined for six quarters in a row and the current quarter will make it seven. Although our data series only covers the last forty quarters and is perhaps too short for generalisations, it would be unusual for the Forecasts/Revision Score series to have an eighth down quarter in a row. Perhaps the market's robust recovery from the Christmas Day low is anticipating such an outcome. Source: Japan AnalyticsUSDJPY NEUTRAL - In the past, one of the principal drivers of both scores has been changes in the US dollar/Yen exchange rate. The chart above merges both scores to create a cleaner timeline, and key turning points in JUSDJPY CURNCY highlighted. With the currency cross trading in a narrow range, there is little support or stimulus in the next six months. However, any sustained weakness in the Yen, such as occurred from September 2016, will be another confirmation that a cycle low has been reached. In the DETAIL section below, we update our  Sector Results &amp; Revision Scores and look at the best and worst large-cap company results over the seven trading days.

🇯🇵 Japan • Spring Results & Revisions Flash - Early Days

Japan

ORIENTAL LAND CO., LTD. operates Tokyo Disney Resort.  The Company also operates restaurants within the complex and sells Disney merchandise.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Oriental Land (4661 JP)

🇯🇵 Japan • September Relative Price Scores - Life at the Poles Part 1

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the...

Campbell Gunn

🇯🇵 JAPAN • Market Update - Resilience

RESILIENCE - Japanese equities have risen by 2.9% since the low of 4th June. In US dollar terms, the gain is 3.7%. Over the last two weeks, the...

Campbell Gunn

Global Ex-U.S. Equity Strategy: Cautiously Optimistic Outlook Intact

Despite negative recent developments, we have remained steadfast in our belief that weakness in May has presented an attractive time to add...

Vermilion Research

🇯🇵 Japan • June Relative Price Scores: Market, Sectors & Peer Groups - More of The Same

• RELATIVE PRICE SCORE •The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the...

Campbell Gunn

🇯🇵 Japan • Spring Results & Revisions Flash - Early Days

EARLY DAYS - In the last seven trading days, 473 Japanese companies have reported quarterly results, 11% of the 3,830 that are currently listed. Of...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)