'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)

<div><p style="text-align: center;"><strong>• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •</strong></p></div><div><p>Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.</p></div><div>
<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
<p style="text-align: left;">Thursday's 'best' large-cap announcements were <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden (4062 JP)</a>, <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, and <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data (9613 JP)</a>. The 'worst' came from <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">MUFG (8306 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank (9434 JP)</a>, and <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>.   </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/914/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186914"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/912/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186912"></figure></section><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/913/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186913"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/911/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186911"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/910/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186910"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/915/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186915"></figure></section></section>
</div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.
• BEST &amp; WORST •
Thursday's 'best' large-cap announcements were Ibiden (4062 JP), Takeda Pharmaceutical (4502 JP), and NTT Data (9613 JP). The 'worst' came from MUFG (8306 JP), Softbank (9434 JP), and Mercari (4385 JP).   

Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><div>
<p>Our best and worst pair from yesterday's announcements is <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden (4062 JP)</a> and <a href="https://www.smartkarma.com/entities/kao-corp" target="_blank" data-smartkarma-citation="entities:12933:1" rel="noopener">Kao (4452 JP). </a> </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/168/135/original/2020-10-29_06-17-58.png?1603919897" class="editor-image img-responsive" data-smartkarma-image-id="168135"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/168/136/original/2020-10-29_06-18-56.png?1603919953" class="editor-image img-responsive" data-smartkarma-image-id="168136"></figure></section>
</div><div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></div><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>88 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 52% Positive / 2% Neutral / 45% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> -0.5 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -5.9% Quarter YoY / -4.2% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change</strong>: -2.0ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 20%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>66 Annual • 39 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score</strong>: 44% Positive / 11% Neutral / 45% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 44% Positive / 18% Neutral / 38% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -0.6 points</p></li>
</ul></div>

• BEST &amp; WORST •
Our best and worst pair from yesterday's announcements is Ibiden (4062 JP) and Kao (4452 JP).  

Source for all charts &amp; tables: Japan AnalyticsDAILY STATS88 Quarterly Results
Results Score: 52% Positive / 2% Neutral / 45% Negative
Average Results Score Change: -0.5 points
Average % Change in Revenue: -5.9% Quarter YoY / -4.2% Rolling TTM YoY 
Average Operating Profit Margin Change: -2.0ppt
Percentage Making Quarterly Losses: 20%
66 Annual • 39 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 44% Positive / 11% Neutral / 45% Negative
Interim Forecast/Revision Score Change: 44% Positive / 18% Neutral / 38% Negative
Average Forecast/Revision Score Change: -0.6 points


🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​​​​​28 - Ibiden, Sony, Komatsu, Kao, Toyo Suisan

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

<p style="text-align: center;"><strong>• MARKET COMPOSITE - AGGREGATE RESULTS •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/865/original/2019-08-16_06-45-04.png?1565905530" class="editor-image img-responsive" data-smartkarma-image-id="95865"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>THIRD DOWN QUARTER</strong> - This Insight will review the aggregate results for the 3774 listed Japanese companies for the quarter just ended and updated our Results &amp; Revision Scores for the Market Composite and each of our 30 Sectors. Operating Income has declined by 1.8% since the end of May and is now 5.1% below the peak of December 21st last year. The decline in Net Income has been more significant - 15.7% from the peak and 3.5% since May.  Japan's aggregate trailing-twelve-month (TTM) Net Income will end this year at a lower level than two years ago. </p><p><strong>FORECASTS STILL OPTIMISTIC</strong> -  The 'gap' between current and forecast results is now the widest in two years; however, the 'roles' are reversed. Aggregate forecasts have declined by 1.4% for Operating Income and 1.6% for Net Income and the forecast 'improvements' by year-end are 3% and 6%, respectively, which we consider optimistic. </p><p><strong>UPSIDE LIMITED</strong> - The decline in the market in recent weeks has taken the forward multiple to the second-lowest level this year at 13.7 times. Alternatively, the market is implying a further 17% decline in Net Income, assuming a 'normal' market multiple of 16.7 times. We are more inclined to the latter possibility.</p><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/770/original/2019-08-15_12-05-51.png?1565838392" class="editor-image img-responsive" data-smartkarma-image-id="95770"></figure><p>Source: Japan Analytics </p>
</div><p><strong>MARGIN ROLLOVER</strong> - Revenues are still increasing by 3.8% a year; however, the rolling quarterly rate of increase is slowing to just 0.4% in the quarter just ended while the forecast-implied growth rate for the next nine months is 2%.  Operating margins peaked at 7.78% one year ago and have since declined by 61 basis points since then.  TTM Net Margins are now 4.83% and have declined by 102 basis points in the last three quarters.</p><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/772/original/2019-08-15_12-26-32.png?1565839621" class="editor-image img-responsive" data-smartkarma-image-id="95772"></figure><p>Source: Japan Analytics </p>
</div><p><strong>SECTOR MARGINS - TOP</strong> - <strong>Bank</strong> Sector margins continue to slide, but have yet to lose their leading position to <strong>Telecoms</strong> despite the latter's margins being unchanged over three months. <strong>Internet</strong> and b both saw large margins contractions as did <strong>Chemicals</strong> which may slip out of this group next quarter. The most robust performance came from our long-time preferred Sector, <strong>Infomation Technology</strong>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/773/original/2019-08-15_12-44-16.png?1565840676" class="editor-image img-responsive" data-smartkarma-image-id="95773"></figure><div class="content-caption">Source: Japan Analytics </div><p><strong>SECTOR MARGINS - MID</strong> - The <strong>Market Composite</strong> OPM has declined by 27 basis points in the last three months to 7.2%, and only nine of 29 Sectors have higher margins. Of the mid-ranked Sectors by margins, only <strong>Multi-Industry</strong> and <strong>Consumer Services</strong> saw margin increases of more than ten basis points. The worst-performing in this group were <strong>Food, Beverage &amp; Tobacco</strong> and <strong>Technology Hardwar</strong>e. Over a longer-term period, there has been a notable decline in <strong>Construction</strong> and<strong> Non-Bank Finance</strong> Sector margins. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/774/original/2019-08-15_12-52-37.png?1565841201" class="editor-image img-responsive" data-smartkarma-image-id="95774"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>SECTOR MARGINS - BOTTOM </strong>- Only <strong>Utilities</strong> of the bottom-nine OPM Sectors saw a margin improvement in the last three months, while<strong> Building Materials</strong>, <strong>Autos</strong>,<strong> Metals</strong>, <strong>Energy</strong>, and <strong>Other Materials</strong> all had double-digit declines. <strong>Retail</strong> margins are the most stable amongst this group,</p><p><strong>OUTLOOK</strong> - Aggregate results are a lagging indicator for the market, having peaked one year after the market peak of January 2018 - which is why we prefer to rely more on our scoring methodology (see below). Accordingly, we expect the trend in profits and margins to continue to be negative for the rest of the fiscal year and look for revenues to join the trend next quarter.  A breach of the December market low would be required to keep the market multiple below 'normal' levels, and we would advise patience for all but the most committed investors in Japanese equities.  </p><hr><p style="text-align: center;"><strong>• RESULTS &amp; REVISION SCORE •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/869/original/2019-08-16_06-50-04.png?1565905842" class="editor-image img-responsive" data-smartkarma-image-id="95869"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>RESULT &amp; REVISION SCORE </strong>- After peaking in November 2017, our Results &amp; Revision Score has declined for six of the last seven quarters, the exception being the previous quarter which was 'supported' by the optimistic full-year forecasts made in May, As shown below, the Annual forecasts were at 'odds' with the more pessimistic forecasts for the half-year - half-way through the half-year, the latter are proving to be more reliable. Ove the last two years, the correlation between the Results &amp; Revision Score and Total Market Cap ex REITs has been 0.78.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/838/original/2019-08-15_18-08-12.png?1565860115" class="editor-image img-responsive" data-smartkarma-image-id="95838"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>28-MONTH LOW</strong> - The Results &amp; Revision Score has three components, Results, Annual Forecasts &amp; Revisions and Interim Forecasts &amp; Revisions, and the last two can be combined to derive a Forecast &amp; Revision Score. The Forecast &amp; Revision Score is a good leading indicator for the Results Score with a lead-time of four to six months. Although still positive, the Results Score is at a new twenty-eight low of 1.25. The Score has only been negative for ten months since May 2010 reaching a nine-year low in December 2016. If current global macro indicators are correct, the Results Score should be heading into negative territory by the third-quarter results which will be released in February next year.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/839/original/2019-08-15_18-23-10.png?1565861002" class="editor-image img-responsive" data-smartkarma-image-id="95839"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>INTERIM v FULL-YEAR FORECASTS</strong> - The Forecast &amp; Revision Score is a weighted combination of two forecast series based on the official company forecasts released and updated by most Japanese companies throughout the year. The Annual forecasts tend to receive more senior management attention than the Interim, which are often delegated to the CFO. As a result, the latter series is more volatile, leading on the downside from peaks and lagging on the upside from toughs. The current Interim Score is the second-lowest in nine years, after April 2016 and has offset the optimism implied in the uptick in the Annual Score this May. <strong>If the precedents of 2011 and 2016 are to be followed, the Results Score should bottom out eight months from now, in April 2020.</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/870/original/2019-08-16_06-58-00.png?1565906307" class="editor-image img-responsive" data-smartkarma-image-id="95870"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>CURRENCY IN THE DRIVING SEAT</strong> - The importance of the currency as a key driver in the earnings cycle in Japan is well illustrated above where the peaks and troughs of the year-on-year change in the US$/Yen exchange rate lagged by six months align well with the changes the Results &amp; Revision Score (RRS), where the correlation is 0.79 since the beginning of 2014. The recent strengthening of the Yen suggests a new low for the RRS in the first half of 2020.</p><p>In the <strong>DETAIL</strong> section below, we shall examine the detailed trends in earnings results and forecasts for the 29 Sectors that make up our Market Composite as well as the Sector Results &amp; Revisions Scores.</p>

• MARKET COMPOSITE - AGGREGATE RESULTS •Source: Japan AnalyticsTHIRD DOWN QUARTER - This Insight will review the aggregate results for the 3774 listed Japanese companies for the quarter just ended and updated our Results &amp; Revision Scores for the Market Composite and each of our 30 Sectors. Operating Income has declined by 1.8% since the end of May and is now 5.1% below the peak of December 21st last year. The decline in Net Income has been more significant - 15.7% from the peak and 3.5% since May.  Japan's aggregate trailing-twelve-month (TTM) Net Income will end this year at a lower level than two years ago. FORECASTS STILL OPTIMISTIC -  The 'gap' between current and forecast results is now the widest in two years; however, the 'roles' are reversed. Aggregate forecasts have declined by 1.4% for Operating Income and 1.6% for Net Income and the forecast 'improvements' by year-end are 3% and 6%, respectively, which we consider optimistic. UPSIDE LIMITED - The decline in the market in recent weeks has taken the forward multiple to the second-lowest level this year at 13.7 times. Alternatively, the market is implying a further 17% decline in Net Income, assuming a 'normal' market multiple of 16.7 times. We are more inclined to the latter possibility.
Source: Japan Analytics 
MARGIN ROLLOVER - Revenues are still increasing by 3.8% a year; however, the rolling quarterly rate of increase is slowing to just 0.4% in the quarter just ended while the forecast-implied growth rate for the next nine months is 2%.  Operating margins peaked at 7.78% one year ago and have since declined by 61 basis points since then.  TTM Net Margins are now 4.83% and have declined by 102 basis points in the last three quarters.
Source: Japan Analytics 
SECTOR MARGINS - TOP - Bank Sector margins continue to slide, but have yet to lose their leading position to Telecoms despite the latter's margins being unchanged over three months. Internet and b both saw large margins contractions as did Chemicals which may slip out of this group next quarter. The most robust performance came from our long-time preferred Sector, Infomation Technology.Source: Japan Analytics SECTOR MARGINS - MID - The Market Composite OPM has declined by 27 basis points in the last three months to 7.2%, and only nine of 29 Sectors have higher margins. Of the mid-ranked Sectors by margins, only Multi-Industry and Consumer Services saw margin increases of more than ten basis points. The worst-performing in this group were Food, Beverage &amp; Tobacco and Technology Hardware. Over a longer-term period, there has been a notable decline in Construction and Non-Bank Finance Sector margins. Source: Japan AnalyticsSECTOR MARGINS - BOTTOM - Only Utilities of the bottom-nine OPM Sectors saw a margin improvement in the last three months, while Building Materials, Autos, Metals, Energy, and Other Materials all had double-digit declines. Retail margins are the most stable amongst this group,OUTLOOK - Aggregate results are a lagging indicator for the market, having peaked one year after the market peak of January 2018 - which is why we prefer to rely more on our scoring methodology (see below). Accordingly, we expect the trend in profits and margins to continue to be negative for the rest of the fiscal year and look for revenues to join the trend next quarter.  A breach of the December market low would be required to keep the market multiple below 'normal' levels, and we would advise patience for all but the most committed investors in Japanese equities.  • RESULTS &amp; REVISION SCORE •Source: Japan AnalyticsRESULT &amp; REVISION SCORE - After peaking in November 2017, our Results &amp; Revision Score has declined for six of the last seven quarters, the exception being the previous quarter which was 'supported' by the optimistic full-year forecasts made in May, As shown below, the Annual forecasts were at 'odds' with the more pessimistic forecasts for the half-year - half-way through the half-year, the latter are proving to be more reliable. Ove the last two years, the correlation between the Results &amp; Revision Score and Total Market Cap ex REITs has been 0.78.Source: Japan Analytics28-MONTH LOW - The Results &amp; Revision Score has three components, Results, Annual Forecasts &amp; Revisions and Interim Forecasts &amp; Revisions, and the last two can be combined to derive a Forecast &amp; Revision Score. The Forecast &amp; Revision Score is a good leading indicator for the Results Score with a lead-time of four to six months. Although still positive, the Results Score is at a new twenty-eight low of 1.25. The Score has only been negative for ten months since May 2010 reaching a nine-year low in December 2016. If current global macro indicators are correct, the Results Score should be heading into negative territory by the third-quarter results which will be released in February next year.Source: Japan AnalyticsINTERIM v FULL-YEAR FORECASTS - The Forecast &amp; Revision Score is a weighted combination of two forecast series based on the official company forecasts released and updated by most Japanese companies throughout the year. The Annual forecasts tend to receive more senior management attention than the Interim, which are often delegated to the CFO. As a result, the latter series is more volatile, leading on the downside from peaks and lagging on the upside from toughs. The current Interim Score is the second-lowest in nine years, after April 2016 and has offset the optimism implied in the uptick in the Annual Score this May. If the precedents of 2011 and 2016 are to be followed, the Results Score should bottom out eight months from now, in April 2020.Source: Japan AnalyticsCURRENCY IN THE DRIVING SEAT - The importance of the currency as a key driver in the earnings cycle in Japan is well illustrated above where the peaks and troughs of the year-on-year change in the US$/Yen exchange rate lagged by six months align well with the changes the Results &amp; Revision Score (RRS), where the correlation is 0.79 since the beginning of 2014. The recent strengthening of the Yen suggests a new low for the RRS in the first half of 2020.In the DETAIL section below, we shall examine the detailed trends in earnings results and forecasts for the 29 Sectors that make up our Market Composite as well as the Sector Results &amp; Revisions Scores.

🇯🇵 JAPAN • Summer Results & Revisions - Market Composite & Sectors - Third Down

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/809/original/2019-08-04_13-24-01.png?1564892655" class="editor-image img-responsive" data-smartkarma-image-id="94809"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>SOUTHBOUND</strong> - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/810/original/2019-08-04_13-32-15.png?1564893149" class="editor-image img-responsive" data-smartkarma-image-id="94810"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/812/original/2019-08-04_13-39-03.png?1564893556" class="editor-image img-responsive" data-smartkarma-image-id="94812"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>BREAKDOWN</strong> - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/816/original/2019-08-04_13-44-46.png?1564893904" class="editor-image img-responsive" data-smartkarma-image-id="94816"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>YEN DRIVER</strong> - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1" rel="noopener">JUSDJPY CURNCY</a> over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    </p><div class="content-highlight"><p>In the<strong> DETAIL</strong> section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.</p></div><center></center><div class="content-caption">The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell</div>

Source: Japan AnalyticsSOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.Source: Japan AnalyticsBREAKDOWN - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.Source: Japan AnalyticsYEN DRIVER - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in JUSDJPY CURNCY over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    In the DETAIL section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

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

<p>Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.</p>

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Japan

IBIDEN CO, LTD. develops, produces, and markets ceramics, housing materials, and electronics.  The Company's products include printed circuit boards (PCB), graphite specialties, integrated circuit (IC) packages, ceramic fibers, melamine decorative high-pressure laminates, and pre-cut structural materials.

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Ibiden Co Ltd (4062 JP)

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 10/28 - Ibiden, Sony, Komatsu, Kao, Toyo Suisan

• BEST & WORST • Our best and worst pair from yesterday's announcements is Ibiden (4062 JP) and Kao (4452 JP). ________________

Campbell Gunn

🇯🇵 JAPAN • Summer Results & Revisions - Market Composite & Sectors - Third Down

• MARKET COMPOSITE - AGGREGATE RESULTS •THIRD DOWN QUARTER - This Insight will review the aggregate results for the 3774 listed Japanese companies...

Campbell Gunn

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings...

Campbell Gunn

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical...

Vermilion Research

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🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​​​​​28 - Ibiden, Sony, Komatsu, Kao, Toyo Suisan

• BEST & WORST • Our best and worst pair from yesterday's announcements is Ibiden (4062 JP) and Kao (4452 JP). ________________

Campbell Gunn

🇯🇵 JAPAN • Summer Results & Revisions - Market Composite & Sectors - Third Down

• MARKET COMPOSITE - AGGREGATE RESULTS •THIRD DOWN QUARTER - This Insight will review the aggregate results for the 3774 listed Japanese companies...

Campbell Gunn

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings...

Campbell Gunn

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical...

Vermilion Research

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.

🇯🇵 JAPAN • Results & Revisions 10/28 - Ibiden, Sony, Komatsu, Kao, Toyo Suisan