'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>
Source: Japan Analytics
</div>
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 <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>.
<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">
Source: Japan Analytics
</div>
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 <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>.
<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">
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.
</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'

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. 

Thematic (Sector/Industry)

Leading Japanese retail chains across all the major formats had a strong 1H2018 with surprisingly few exceptions.
Although some saw operating profits fall, and most of those that did expect profits to be lower for the year as a whole, other results were particularly impressive given the difficult operating conditions this year due to weather and natural disasters.
The following is a quick snapshot of the state-of-play at major Japanese retailers.

Leading Japanese retail chains across all the major formats had a strong 1H2018 with surprisingly few exceptions.
Although some saw operating profits fall, and most of those that did expect profits to be lower for the year as a whole, other results were particularly impressive given the difficult operating conditions this year due to weather and natural disasters.
The following is a quick snapshot of the state-of-play at major Japanese retailers.

Japan Retail Review 1H2018: Top Retailers Outperform

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/1349" target="_blank" data-smartkarma-citation="entities:1349:1">Senshukai (8165 JP)</a> and the other former catalogue-based direct marketers put on a brave face when dealing with the rising threat from e-commerce.
They have converted most of their own customers to the online channel, but the problem of slow, lengthy supply chains remains, resulting in out of date merchandise with poor cost performance.
Senshukai will now begin a period of swingeing cuts to both operations, including a change of CEO and 280 voluntary redundancies among senior staff.

Senshukai (8165 JP) and the other former catalogue-based direct marketers put on a brave face when dealing with the rising threat from e-commerce.
They have converted most of their own customers to the online channel, but the problem of slow, lengthy supply chains remains, resulting in out of date merchandise with poor cost performance.
Senshukai will now begin a period of swingeing cuts to both operations, including a change of CEO and 280 voluntary redundancies among senior staff.

Senshukai (8165 JP) To Shrink After Failing to Remain Relevant

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

Isetan-Mitsukoshi sacked its previous CEO for suggesting it should close several of its loss-making stores. Within six months the new leadership was forced to close one of these, and, after much internal wrangling, will now close three more.
Further stores will have to be closed if it is to meet its (perennially optimistic) profit targets so we can expect a smaller business longer-term but one that might be more profitable if its investment in its remaining stores bears results.

Isetan-Mitsukoshi sacked its previous CEO for suggesting it should close several of its loss-making stores. Within six months the new leadership was forced to close one of these, and, after much internal wrangling, will now close three more.
Further stores will have to be closed if it is to meet its (perennially optimistic) profit targets so we can expect a smaller business longer-term but one that might be more profitable if its investment in its remaining stores bears results.

Isetan-Mitsukoshi Closing 3 More Stores and It Won't End There

Following <a href="https://www.smartkarma.com/insights/japan-department-stores-2018-some-growth-again-and-even-real-profits-part-i" target="_blank">Part I</a> of our review of Japanese department stores, which provided an overview of the sector by region, product category, the top 30 firms and the top 50 stores, we conclude with a review of key trends in the sector and the outlook for the next five years. We expect:
<ul class="">
<li>Further contraction of the sector overall as more stores are closed or converted to shopping buildings (vertical shopping centres).</li>
<li>Such contraction will benefit the remaining stores because the upscale positioning will be underpinned by more investment in fewer stores, and the closed stores are mostly drab and more like GMS stores than upscale emporiums.</li>
<li>A few leading firms will diversify successfully away from a dependence on just department stores.</li>
<li>Continued growth in tourism and the continued growth in the number of wealthy Japanese will underpin stability for the better chains and stores.</li>
<li>A new emphasis on being retailers, rather than just property managers as they were in the past, will lead to higher growth, particularly in terms of profits. These profits will come from higher sales densities and the addition of more high margin merchandise and services.</li>
<li>The likely winners will be <a href="https://www.smartkarma.com/entities/8947" target="_blank" data-smartkarma-citation="entities:8947:1">J Front Retailing (3086 JP)</a>, <a href="https://www.smartkarma.com/entities/370" target="_blank" data-smartkarma-citation="entities:370:1">Takashimaya (8233 JP)</a> and <a href="https://www.smartkarma.com/entities/13058" target="_blank" data-smartkarma-citation="entities:13058:1">Hankyu Hanshin (9042 JP)</a> which is part of <a href="https://www.smartkarma.com/entities/17562" target="_blank" data-smartkarma-citation="entities:17562:1">H2O Retailing (8242 JP)</a>. <a href="https://www.smartkarma.com/entities/18871" target="_blank" data-smartkarma-citation="entities:18871:1">Isetan Mitsukoshi's (3099 JP)</a> more conservative new management, and ongoing closures, and Seven &amp; I's concerted paring down of the Sogo Seibu chain suggest these two firms will underperform.</li>
</ul>

Following Part I of our review of Japanese department stores, which provided an overview of the sector by region, product category, the top 30 firms and the top 50 stores, we conclude with a review of key trends in the sector and the outlook for the next five years. We expect:

Further contraction of the sector overall as more stores are closed or converted to shopping buildings (vertical shopping centres).
Such contraction will benefit the remaining stores because the upscale positioning will be underpinned by more investment in fewer stores, and the closed stores are mostly drab and more like GMS stores than upscale emporiums.
A few leading firms will diversify successfully away from a dependence on just department stores.
Continued growth in tourism and the continued growth in the number of wealthy Japanese will underpin stability for the better chains and stores.
A new emphasis on being retailers, rather than just property managers as they were in the past, will lead to higher growth, particularly in terms of profits. These profits will come from higher sales densities and the addition of more high margin merchandise and services.
The likely winners will be J Front Retailing (3086 JP), Takashimaya (8233 JP) and Hankyu Hanshin (9042 JP) which is part of H2O Retailing (8242 JP). Isetan Mitsukoshi's (3099 JP) more conservative new management, and ongoing closures, and Seven &amp; I's concerted paring down of the Sogo Seibu chain suggest these two firms will underperform.


Japan Department Stores 2018: Some Growth Again and Even Real Profits – Part II

Japan

J. FRONT RETAILING CO., Ltd. is a holding company established through the merger of Daimaru and Matsuzakaya.  J. FRONT RETAILING operates department stores and supermarkets. The Company also manages subsidiaries which operate in wholesale businesses.

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

J Front Retailing (3086 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 Retail Review 1H2018: Top Retailers Outperform

Leading Japanese retail chains across all the major formats had a strong 1H2018 with surprisingly few exceptions. Although some saw operating...

Michael Causton

Senshukai (8165 JP) To Shrink After Failing to Remain Relevant

Senshukai (8165 JP) and the other former catalogue-based direct marketers put on a brave face when dealing with the rising threat from...

Michael Causton

Isetan-Mitsukoshi Closing 3 More Stores and It Won't End There

Isetan-Mitsukoshi sacked its previous CEO for suggesting it should close several of its loss-making stores. Within six months the new leadership...

Michael Causton

Japan Department Stores 2018: Some Growth Again and Even Real Profits – Part II

Following Part I of our review of Japanese department stores, which provided an overview of the sector by region, product category, the top 30...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)