'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE OUTLIERS •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/304/original/2021-01-18_07-21-17.png?1611015356" class="editor-image img-responsive" data-smartkarma-image-id="183304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/305/original/2021-01-19_09-18-35.png?1611015525" class="editor-image img-responsive" data-smartkarma-image-id="183305"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>POLES APART</strong><strong>&amp; ECHOES OF 2000</strong>- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/321/original/2021-01-19_10-25-51.png?1611019564" class="editor-image img-responsive" data-smartkarma-image-id="183321"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/323/original/2021-01-19_10-27-10.png?1611019660" class="editor-image img-responsive" data-smartkarma-image-id="183323"></figure></section><p><strong>BLOW OUT</strong> - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/363/original/2021-01-19_12-45-46.png?1611027961" class="editor-image img-responsive" data-smartkarma-image-id="183363"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/367/original/2021-01-19_13-09-06.png?1611029374" class="editor-image img-responsive" data-smartkarma-image-id="183367"></figure></section><div><p>In the<strong> DETAIL</strong> section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.</p></div><div><div><div class="content-highlight"><p><strong>THE JAPAN ANALYTICS RELATIVE PRICE SCORE</strong> -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.</p></div></div></div>

• RELATIVE PRICE SCORE OUTLIERS •Source for all charts &amp; tables: Japan AnalyticsPOLES APART&amp; ECHOES OF 2000- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.BLOW OUT - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   In the DETAIL section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.THE JAPAN ANALYTICS RELATIVE PRICE SCORE -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.

🇯🇵 JAPAN • January Relative Price Scores -  Actionable Mean Reversion Trades

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Equity Bottom-Up

<p>Our 2021 High Conviction call, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> delivered 3QFY21 results yesterday with operating income surpassing consensus estimate by more than 20%. The company’s 3QFY21 consolidated revenue was 1.2% below consensus. However, the YoY rate of revenue decline narrowed to 10% in 3QFY21, compared to 15.8% in 1HFY21.</p><p>More importantly, Seven &amp; I has rallied 28% from the August low of ¥3,052 per share (at the time of the Speedway acquisition) and 18% since the publication of our high conviction call.</p><ul>
<li><a href="https://www.smartkarma.com/insights/2021-high-conviction-seven-i-holdings-the-march-for-america" target="_blank" rel="noopener">2021 High Conviction - Seven &amp; I Holdings: The March for America</a></li>
<li>
<a href="https://www.smartkarma.com/insights/ev-op-descends-to-a-new-low-an-opportunity-to-gas-up-seven-i-on-the-back-of-speedway-acquisition" target="_blank" data-smartkarma-citation="insights:45098" rel="noopener">EV/OP Descends to A New Low: An Opportunity to Gas Up Seven &amp; I on the Back of Speedway Acquisition</a> </li>
<li><a href="https://www.smartkarma.com/insights/speedway-acquisition-buy-the-dip-as-valuation-falls-near-five-year-low" target="_blank" rel="noopener">Speedway Acquisition: Buy the Dip as Valuation Falls Near Five-Year Low</a></li>
<li><a href="https://www.smartkarma.com/insights/seven-i-acquires-speedway-for-21-billion-expensive-but-necessary-acquisition" target="_blank" rel="noopener">Seven &amp; I Acquires Speedway for $21 Billion: Expensive but Necessary Acquisition</a></li>
</ul>

Our 2021 High Conviction call, Seven &amp; I Holdings (3382 JP) delivered 3QFY21 results yesterday with operating income surpassing consensus estimate by more than 20%. The company’s 3QFY21 consolidated revenue was 1.2% below consensus. However, the YoY rate of revenue decline narrowed to 10% in 3QFY21, compared to 15.8% in 1HFY21.More importantly, Seven &amp; I has rallied 28% from the August low of ¥3,052 per share (at the time of the Speedway acquisition) and 18% since the publication of our high conviction call.
2021 High Conviction - Seven &amp; I Holdings: The March for America

EV/OP Descends to A New Low: An Opportunity to Gas Up Seven &amp; I on the Back of Speedway Acquisition 
Speedway Acquisition: Buy the Dip as Valuation Falls Near Five-Year Low
Seven &amp; I Acquires Speedway for $21 Billion: Expensive but Necessary Acquisition


Seven & I Holdings: OP Beats Could Continue into 4QFY21

<p style="text-align: center;"><strong>• BEST &amp; WORST LARGE CAPS •</strong></p><p>Our pick of Tuesday's best and worst large-cap announcements are <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a> and retailer <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a>.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/182/156/original/2021-01-13_06-07-37.png?1610485671" class="editor-image img-responsive" data-smartkarma-image-id="182156"></figure></section><div class="content-caption">
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/182/161/original/2021-01-13_06-08-37.png?1610485748" class="editor-image img-responsive" data-smartkarma-image-id="182161"></figure></section> ++++Source for all charts &amp; tables: Japan Analytics.++++    </div>

• BEST &amp; WORST LARGE CAPS •Our pick of Tuesday's best and worst large-cap announcements are Yaskawa Electric (6506 JP) and retailer Seven &amp; I (3382 JP).
 ++++Source for all charts &amp; tables: Japan Analytics.++++    

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​08 - Yaskawa, Seven & I

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. 

<p>Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.</p><p>In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But <strong>this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply</strong>.</p><p>But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.</p><p><strong>In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.</strong></p><p><strong>Suddenly wallets are full</strong>, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.</p><p>While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.</p><p>The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.</p><p><em>This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.</em></p>

Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply.But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.Suddenly wallets are full, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

<p>Seven &amp; I had a dismal first half at almost all of its chains. On the plus side, e-commerce sales improved but, even here, results could have been better when compared to what some rivals have achieved online. At least Nissen, the acquired catalogue company, finally returned to profit.</p>

Seven &amp; I had a dismal first half at almost all of its chains. On the plus side, e-commerce sales improved but, even here, results could have been better when compared to what some rivals have achieved online. At least Nissen, the acquired catalogue company, finally returned to profit.

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

🇯🇵 JAPAN • January Relative Price Scores - Actionable Mean Reversion Trades

As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold and those that are...

Campbell Gunn

Seven & I Holdings: OP Beats Could Continue into 4QFY21

Our 2021 High Conviction call, Seven & I delivered 3QFY21 results yesterday with operating income surpassing consensus estimate by more than 20%....

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 01/08 - Yaskawa, Seven & I

Our pick of Tuesday's best and worst large-cap announcements are Yaskawa Electric (6506 JP) and Seven & I (3382 JP). _____

Campbell Gunn

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

The following is a complete, in-depth review of the Japanese apparel/fashion sector covering key trends, rankings of the top 100 by sales and top...

Michael Causton

Seven & I: Still Floundering

Seven & I has tried and failed to gain a foothold in digital markets but looks to be retreating from online food just at a time when competitors...

Michael Causton

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🇯🇵 JAPAN • January Relative Price Scores - Actionable Mean Reversion Trades

As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold and those that are...

Campbell Gunn

Seven & I Holdings: OP Beats Could Continue into 4QFY21

Our 2021 High Conviction call, Seven & I delivered 3QFY21 results yesterday with operating income surpassing consensus estimate by more than 20%....

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​08 - Yaskawa, Seven & I

Our pick of Tuesday's best and worst large-cap announcements are Yaskawa Electric (6506 JP) and Seven & I (3382 JP). _____

Campbell Gunn

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

The following is a complete, in-depth review of the Japanese apparel/fashion sector covering key trends, rankings of the top 100 by sales and top...

Michael Causton

Seven & I: Still Floundering

Seven & I has tried and failed to gain a foothold in digital markets but looks to be retreating from online food just at a time when competitors...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 01/08 - Yaskawa, Seven & I