President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

<ul>
<li>Large portion of the business is in secular decline and facing pricing pressure</li>
<li>
<a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Company Ltd (7752 JP)</a> appears to be losing share in a shrinking market</li>
<li>Estimates are above overly optimistic guidance making shares look optically inexpensive</li>
</ul>


Large portion of the business is in secular decline and facing pricing pressure

Ricoh Company Ltd (7752 JP) appears to be losing share in a shrinking market
Estimates are above overly optimistic guidance making shares look optically inexpensive


Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> announced a second buyback this fiscal year on 15 June. As discussed here previously, Canon buybacks are short, sharp, and sweet. </li>
<li>The recent one should be done imminently (15 May start ended 13 July). 16 June start? (Note: Canon reports buyback results at 3pm local time, and did not report today).</li>
<li>This time we have a double-setup with buyback ending and a large TOPIX sell on Canon on 28 July. </li>
</ul>



Canon Inc (7751 JP) announced a second buyback this fiscal year on 15 June. As discussed here previously, Canon buybacks are short, sharp, and sweet. 
The recent one should be done imminently (15 May start ended 13 July). 16 June start? (Note: Canon reports buyback results at 3pm local time, and did not report today).
This time we have a double-setup with buyback ending and a large TOPIX sell on Canon on 28 July. 


Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.</li>
<li>Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. </li>
<li>This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.</li>
</ul>



Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. 
This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.


Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

David Blennerhassett

<ul>
<li>According to Invest Chosun, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.</li>
<li>
<a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>'s most recent buyback should be done now-ish. They have been ~15-20% of volume over the past month. The Trade would be short Canon vs <a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh (7752 JP)</a>.</li>
</ul>


According to Invest Chosun, Celltrion Inc (068270 KS) plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.

Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.

Canon (7751 JP)'s most recent buyback should be done now-ish. They have been ~15-20% of volume over the past month. The Trade would be short Canon vs Ricoh (7752 JP).


Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata

<ul>
<li>10 days ago <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. </li>
<li>Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. </li>
<li>Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.</li>
</ul>


10 days ago Canon Inc (7751 JP) announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. 
Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. 
Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.


Assessing the Canon Buyback and Follow-On Performance

Japan

RICOH COMPANY, LTD. manufactures and markets office automation equipment, electronic devices, and photographic instruments.  The Company's diverse product line includes facsimiles, image scanners, printers, digital cameras, and personal computers, as well as a full range of analog, digital, and color copiers. Ricoh operates with a network of sales offices and tie-ups worldwide.

Ricoh Company Ltd (7752 JP)

Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

A large portion of Ricoh's business is losing market share in an industry that is facing secular declines. Estimates that above optimistic...

Robert C Prather Jr

Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket

Canon's recent buyback should almost be done. Historically, Canon underperforms Peers post buyback end. This time, we also have a TOPIX downweight...

Travis Lundy

Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Canon results were OK but underperformed expectations at the net level. Guidance for 2024 are slightly above consensus. Interesting news is that...

Travis Lundy

Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Assessing the Canon Buyback and Follow-On Performance

The Canon buyback started 7 trading days ago and is likely nearly done. EPS forecasts are on the up vs peers. Stock is outperforming. There is a...

Travis Lundy