'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

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/837/original/2019-01-18_11-35-42.png?1547778954" class="editor-image img-responsive" data-smartkarma-image-id="75837"></figure>
<p>Source: Japan Analytics</p>
</div>
<p><strong>RELATIVE PRICE SCORE</strong> - The Relative Price Score (RPS) measures stock price performance relative to TOPIX and is calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are, as a result, on a comparable scale, 'overbought' and 'oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. This insight updates our list of overbought and oversold companies, reviews the best and worst performing companies by RPS over the last two months and adds some specific comments on stocks on each category.</p>
<p><strong>RPS STATISTICS</strong> - The Company 'outlier' thresholds are set to "+4" for overbought and "-2" for oversold.  Currently, of the 3,686 listed companies for which monthly data is available, 91 companies are 'Overbought', and 120 are 'Oversold' - 2.5% and 3.2%, respectively of the total. For companies with a market capitalisation of over ¥100b, there are 35 'Overbought' and 24 'Oversold' companies. </p>
<p><strong>RPS 'TOPS'</strong> - In the last two years, 445 companies have achieved an RPS of '4' or more. 80% have seen their RPS fall to below '4' within the following two months. For companies with a market capitalisation higher than ¥100b, the numbers are 95 companies and 63% - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last two months have been <a href="https://www.smartkarma.com/entities/8225" target="_blank" data-smartkarma-citation="entities:8225:1">Descente (8114 JP)</a>,  <a href="https://www.smartkarma.com/entities/4908" target="_blank" data-smartkarma-citation="entities:4908:1">Ariake Japan (2815 JP)</a>, <a href="https://www.smartkarma.com/entities/15862" target="_blank" data-smartkarma-citation="entities:15862:1">Fancl (4921 JP)</a>, <a href="https://www.smartkarma.com/entities/13435" target="_blank" data-smartkarma-citation="entities:13435:1">Bandai Namco (7832 JP)</a>, <a href="https://www.smartkarma.com/entities/13475" target="_blank" data-smartkarma-citation="entities:13475:1">Don Quijote (7532 JP)</a>, and <a href="https://www.smartkarma.com/entities/1492" target="_blank" data-smartkarma-citation="entities:1492:1">Gmo Payment Gateway (3769 JP)</a>.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/838/original/2019-01-18_11-36-19.png?1547778995" class="editor-image img-responsive" data-smartkarma-image-id="75838"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/839/original/2019-01-18_11-37-01.png?1547779035" class="editor-image img-responsive" data-smartkarma-image-id="75839"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/840/original/2019-01-18_11-37-37.png?1547779070" class="editor-image img-responsive" data-smartkarma-image-id="75840"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/841/original/2019-01-18_11-38-07.png?1547779100" class="editor-image img-responsive" data-smartkarma-image-id="75841"></figure>
<div class="content-caption">
<p>Source: Japan Analytics</p>
</div>
<p><strong>RPS 'BOTTOMS'</strong> - 296 companies have seen their RPS fall to '-2' or below in the last two years. 58% have seen their RPS recover to above '-2' within three to six months. For larger capitalisation companies, the numbers are 72 companies and 67%. Some recent examples of positive RPS mean reversion in the last two months have been <a href="https://www.smartkarma.com/entities/22772" target="_blank" data-smartkarma-citation="entities:22772:1">LINE Corp (3938 JP)</a> - a 'contrarians only' selection in our last <a href="https://www.smartkarma.com/insights/japan-relative-price-score-update-overbought-and-oversold-companies" target="_blank" data-smartkarma-citation="insights:25849">Insight</a>, and <a href="https://www.smartkarma.com/entities/15457" target="_blank" data-smartkarma-citation="entities:15457:1">Tokyo Electric Power (9501 JP)</a>.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/842/original/2019-01-18_11-39-56.png?1547779218" class="editor-image img-responsive" data-smartkarma-image-id="75842"></figure>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/843/original/2019-01-18_11-42-06.png?1547779350" class="editor-image img-responsive" data-smartkarma-image-id="75843"></figure>
<div class="content-caption">Source: Japan Analytics</div>
<div class="content-highlight">
<p style="text-align: left;">In the <strong>DETAIL </strong>section below we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the largest two-month positive and negative changes in RPS.</p>
<p style="text-align: center;"><strong>NB - All data is as of January 17th close.</strong></p>
</div>



Source: Japan Analytics

RELATIVE PRICE SCORE - The Relative Price Score (RPS) measures stock price performance relative to TOPIX and is calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are, as a result, on a comparable scale, 'overbought' and 'oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. This insight updates our list of overbought and oversold companies, reviews the best and worst performing companies by RPS over the last two months and adds some specific comments on stocks on each category.
RPS STATISTICS - The Company 'outlier' thresholds are set to "+4" for overbought and "-2" for oversold.  Currently, of the 3,686 listed companies for which monthly data is available, 91 companies are 'Overbought', and 120 are 'Oversold' - 2.5% and 3.2%, respectively of the total. For companies with a market capitalisation of over ¥100b, there are 35 'Overbought' and 24 'Oversold' companies. 
RPS 'TOPS' - In the last two years, 445 companies have achieved an RPS of '4' or more. 80% have seen their RPS fall to below '4' within the following two months. For companies with a market capitalisation higher than ¥100b, the numbers are 95 companies and 63% - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last two months have been Descente (8114 JP),  Ariake Japan (2815 JP), Fancl (4921 JP), Bandai Namco (7832 JP), Don Quijote (7532 JP), and Gmo Payment Gateway (3769 JP).





Source: Japan Analytics

RPS 'BOTTOMS' - 296 companies have seen their RPS fall to '-2' or below in the last two years. 58% have seen their RPS recover to above '-2' within three to six months. For larger capitalisation companies, the numbers are 72 companies and 67%. Some recent examples of positive RPS mean reversion in the last two months have been LINE Corp (3938 JP) - a 'contrarians only' selection in our last Insight, and Tokyo Electric Power (9501 JP).


Source: Japan Analytics

In the DETAIL section below we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the largest two-month positive and negative changes in RPS.
NB - All data is as of January 17th close.


Japan: Relative Price Scores - Overbought and Oversold Companies - Calling 'Tops' & 'Bottoms'

<p><strong>MOVING AVERAGE OUTLIERS</strong> - Our moving average outlier indicator uses a weighted sum of the share price relative to the 5-day, 20-day, 60-day, 120 day and 240-day moving averages. Extreme values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen in future. </p><p><strong>NOVEMBER 11TH OUTLIERS</strong> - Of the positive outliers featured two weeks ago, <a href="https://www.smartkarma.com/entities/8467" target="_blank" data-smartkarma-citation="entities:8467:1">Workman (7564 JP)</a> was unchanged over the last nine trading days, while <a href="https://www.smartkarma.com/entities/24540" target="_blank" data-smartkarma-citation="entities:24540:1">SanBio (4592 JP)</a> and <a href="https://www.smartkarma.com/entities/410" target="_blank" data-smartkarma-citation="entities:410:1">Goldwin (8111 JP)</a> have risen by 15$ and 4%, respectively. Overall our list of Large Cap Outliers has declined by 3% with the worst performers being <a href="https://www.smartkarma.com/entities/8225" target="_blank" data-smartkarma-citation="entities:8225:1">Descente (8114 JP)</a> (-20%), <a href="https://www.smartkarma.com/entities/26753" target="_blank" data-smartkarma-citation="entities:26753:1">RENOVA (9519 JP)</a> (-17%) and <a href="https://www.smartkarma.com/entities/1301" target="_blank" data-smartkarma-citation="entities:1301:1">Infomart (2492 JP)</a> (-16%). The negative outliers also declined by 3% with the 'fallen angels' <a href="https://www.smartkarma.com/entities/2829" target="_blank" data-smartkarma-citation="entities:2829:1">UT (2146 JP)</a>, <a href="https://www.smartkarma.com/entities/18379" target="_blank" data-smartkarma-citation="entities:18379:1">ZOZO (3092 JP)</a> and <a href="https://www.smartkarma.com/entities/7431" target="_blank" data-smartkarma-citation="entities:7431:1">Outsourcing (2427 JP)</a> continuing their descent.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/071/098/original/2018-11-25_14-18-26.png?1543123178" class="editor-image img-responsive" data-smartkarma-image-id="71098"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/071/099/original/2018-11-25_14-19-26.png?1543123202" class="editor-image img-responsive" data-smartkarma-image-id="71099"></figure><div class="content-caption">Source: Japan Analytics</div><div class="content-highlight"><p>In the <strong>DETAIL</strong> section below, we highlight the current top and bottom twenty-five larger capitalisation outliers as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note. </p></div>

MOVING AVERAGE OUTLIERS - Our moving average outlier indicator uses a weighted sum of the share price relative to the 5-day, 20-day, 60-day, 120 day and 240-day moving averages. Extreme values are weighted sums greater than 100% and less than -100%. We would caution that this indicator is best used for timing shorter-term reversals and, in many cases, higher highs and lower lows will be seen in future. NOVEMBER 11TH OUTLIERS - Of the positive outliers featured two weeks ago, Workman (7564 JP) was unchanged over the last nine trading days, while SanBio (4592 JP) and Goldwin (8111 JP) have risen by 15$ and 4%, respectively. Overall our list of Large Cap Outliers has declined by 3% with the worst performers being Descente (8114 JP) (-20%), RENOVA (9519 JP) (-17%) and Infomart (2492 JP) (-16%). The negative outliers also declined by 3% with the 'fallen angels' UT (2146 JP), ZOZO (3092 JP) and Outsourcing (2427 JP) continuing their descent.Source: Japan AnalyticsIn the DETAIL section below, we highlight the current top and bottom twenty-five larger capitalisation outliers as well as those companies that have seen the most significant positive and negative changes in their outlier percentage in the last two weeks and provide short comments on companies of particular note. 

Japan: Moving Average Outliers - Bitcoin Bust, Mitsui M&S & Euro ¥ CBs

Equity Analyst, LightStream Research

Chacko Jacob

Equity Analyst

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.

Equity Bottom-Up

<p>As far as the history of Japanese department stores goes, <a href="https://www.smartkarma.com/entities/370" target="_blank" data-smartkarma-citation="entities:370:1">Takashimaya (8233 JP)</a> is one of the newer stores in the country despite being founded nearly 190 years ago. Even in terms of market cap, the company is only the fourth largest among domestic department stores. However, the company is now plotting a new course to increase sales and traffic. In this report, we will analyse the company’s medium and long-term plans to grow revenue while also weighing its performance against that of industry peers. </p>

As far as the history of Japanese department stores goes, Takashimaya (8233 JP) is one of the newer stores in the country despite being founded nearly 190 years ago. Even in terms of market cap, the company is only the fourth largest among domestic department stores. However, the company is now plotting a new course to increase sales and traffic. In this report, we will analyse the company’s medium and long-term plans to grow revenue while also weighing its performance against that of industry peers. 

Takashimaya(8233): ASEAN Projects and Inbound Sales Offer Positive Long-Term Growth Outlook

Pan Pacific International Holdings / Equity Bottom-Up

Pan Pacific International Holdings (7532 JP)

<p><a href="https://www.smartkarma.com/entities/13475" target="_blank" data-smartkarma-citation="entities:13475:1">Don Quijote Holdings Co Ltd (7532 JP)</a> announced their 3Q results yesterday, posting YoY revenue growth of 18.8% while OP growth remained flat. For the 9MFY18, revenue was up 13.4% YoY at JPY 703bn and OP 7.9% at JPY 40b. While the company has attributed its strong revenue growth to improving macro conditions in the domestic market, it also implied that aggressive marketing strategies had weighed down on margins. Donki's stock price was down 8% at the time of writing this report. We think this is…</p>

Don Quijote Holdings Co Ltd (7532 JP) announced their 3Q results yesterday, posting YoY revenue growth of 18.8% while OP growth remained flat. For the 9MFY18, revenue was up 13.4% YoY at JPY 703bn and OP 7.9% at JPY 40b. While the company has attributed its strong revenue growth to improving macro conditions in the domestic market, it also implied that aggressive marketing strategies had weighed down on margins. Donki's stock price was down 8% at the time of writing this report. We think this is…

Tourism and New Stores Drive Donki's Revenue in 3Q

<p>If you have strolled along Bunkamura-dori in Shibuya recently, it is unlikely that you would have missed the colossal yellow "MEGA" sign on a 5-storey building. The 24-hour discount store, Don Quijote, offers everything from pharmaceuticals to cosplay costumes. Don Quijote has become an essential part of the itinerary for tourists, especially those from Asia. So it is no surprise that the company has directed its growth strategy to overseas expansion, opening a store in Singapore in 2017 and soon, one in Bangkok. However, Japan remains its mainstay as the population continues to hunt for discounts. In this report, we take a look at the following:</p><ul><li>The rise of Donki as the "discount culture" evolved.</li><li>The importance of having its own private brand of goods.</li><li>How tourism has become essential to sustain growth.</li><li>Reasons likely to help Donki's overseas business prosper.</li><li>Lastly, we will pit the company against its peers which include convenience stores, department stores and fashion retailers. </li></ul>

If you have strolled along Bunkamura-dori in Shibuya recently, it is unlikely that you would have missed the colossal yellow "MEGA" sign on a 5-storey building. The 24-hour discount store, Don Quijote, offers everything from pharmaceuticals to cosplay costumes. Don Quijote has become an essential part of the itinerary for tourists, especially those from Asia. So it is no surprise that the company has directed its growth strategy to overseas expansion, opening a store in Singapore in 2017 and soon, one in Bangkok. However, Japan remains its mainstay as the population continues to hunt for discounts. In this report, we take a look at the following:The rise of Donki as the "discount culture" evolved.The importance of having its own private brand of goods.How tourism has become essential to sustain growth.Reasons likely to help Donki's overseas business prosper.Lastly, we will pit the company against its peers which include convenience stores, department stores and fashion retailers. 

Japan

Takashimaya Company, Limited., founded in Kyoto in 1831, operates department stores.  The Company's main stores are located in Tokyo, Osaka, and Kyoto. Takashimaya also operates department stores in Paris, France, Singapore, China, Australia, and New York, USA.  The Company retails clothing, foods, art objects, sundry goods, and household utensils.  The Company also operates restaurants.

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Takashimaya (8233 JP)

Japan: Relative Price Scores - Overbought and Oversold Companies - Calling 'Tops' & 'Bottoms'

RELATIVE PRICE SCORE - The Relative Price Score (RPS) measures stock price performance relative to TOPIX and is calculated by comparing the...

Campbell Gunn

Japan: Moving Average Outliers - Bitcoin Bust, Mitsui M&S & Euro ¥ CBs

MOVING AVERAGE OUTLIERS - Our moving average outlier indicator uses a weighted sum of the share price relative to the 5-day, 20-day, 60-day, 120...

Campbell Gunn

Takashimaya(8233): ASEAN Projects and Inbound Sales Offer Positive Long-Term Growth Outlook

As far as the history of Japanese department stores goes, Takashimaya (8233 JP) is one of the newer stores in the country despite being founded...

Chacko Jacob

Tourism and New Stores Drive Donki's Revenue in 3Q

Don Quijote Holdings Co Ltd (7532 JP) announced their 3Q results yesterday, posting YoY revenue growth of 18.8% while OP growth remained flat. For...

Chacko Jacob

A Stallion in “Donki” Clothing?

If you have strolled along Bunkamura-dori in Shibuya recently, it is unlikely that you would have missed the colossal yellow "MEGA" sign on a...

Chacko Jacob

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