'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. 

Thematic (Sector/Industry)

RELATIVE PRICE SCORE - The Japan Analytics' Relative Price Score (RPS) is a measure of stock price performance relative to the index (TOPIX) and is calculated monthly since listing and daily for the last 260 trading days. The score is based on the mean absolute deviation of the relative stock price and is calculated by comparing each monthly or daily deviation with the mean. Scores can be either negative or positive, however, as all companies are now on a comparable scale, outliers and changes can reveal short-term and long-term trading opportunities. In addition, company data is aggregated into Peer Group and Sectors Relative Price Scores which can be useful for sector allocation and timing. 
MARKET POLARISATION -  The percentage of the market that is either a positive or negative outlier also tends to be indicative of significant market moves. Currently, the percentage of companies that are Relative Price Score positive outliers it is a 27-year high at 4.4% while the percentage of negative outliers is at a 15-year high at 2.1%. The last period when the combined percentage of outliers exceeded the current level of 6% was during the TMT 'bubble' of 2000-1. In the past, such periods of extreme market concentration, especially in the positive outliers, have rarely persisted for more than one quarter and have usually coincided with market peaks. It remains to be seen if this time is different. 
THE "J NIFTY-FIFTY" - The momentum-driven concentration in the 50 most over-priced Japanese growth stocks has produced an average one-year ‘Nifty-Fifty’ performance of 60%. For portfolio managers willing to go along for this ride, the result has been a career-defining period of relative glory while value-orientated peers have suffered another year in the performance 'doghouse'.  The last chapter of this tale requires no spoiler alert. Currently, twenty-eight of our fifty have negative of flat earnings momentum, and eighteen have seen a decline in Relative Price Score in the last month. We look for further downside ahead in earnings and price momentum and will use the RPS as a guide to which Sectors, Peer Groups and companies are most at risk of price correction and suggest some oversold opportunities as replacements.
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 SECTOR RECOMMENDATIONS 
LONG
Healthcare • Energy • Other Commercial Products • Utilities • Information Technology
SHORT
Multi-Industry • Metals • Chemicals • Autos • Machinery • Banks • Consumer Services
<hr>
PEER GROUP RECOMMENDATIONS
LONG
Commercial Printing Services • Electric Power Utilities
SHORT
Musical Instruments • Personal Products • Management Consulting Services 
Amusement Parks &amp; Arcades 
<hr>
COMPANY RECOMMENDATIONS
LONG
<a href="https://www.smartkarma.com/entities/19388" target="_blank" data-smartkarma-citation="entities:19388:1">Dai Nippon Printing (7912 JP)</a> • <a href="https://www.smartkarma.com/entities/14574" target="_blank" data-smartkarma-citation="entities:14574:1">Chubu Electric Power (9502 JP)</a>
SHORT
<a href="https://www.smartkarma.com/entities/5718" target="_blank" data-smartkarma-citation="entities:5718:1">Shiseido (4911 JP)</a> • <a href="https://www.smartkarma.com/entities/4126" target="_blank" data-smartkarma-citation="entities:4126:1">Lasertec (6920 JP)</a> • <a href="https://www.smartkarma.com/entities/4622" target="_blank" data-smartkarma-citation="entities:4622:1">Funai Soken (9757 JP)</a> 
 <a href="https://www.smartkarma.com/entities/10524" target="_blank" data-smartkarma-citation="entities:10524:1">Yume No Machi Souzou Iinkai (2484 JP)</a> • <a href="https://www.smartkarma.com/entities/17841" target="_blank" data-smartkarma-citation="entities:17841:1">Yamaha (7951 JP)</a>
<hr>
RELATIVE PRICE SCORE PORTFOLIOS
Two following insights in the coming week will focus on constructing long and short portfolios based on Relative Price Score outliers.

RELATIVE PRICE SCORE - The Japan Analytics' Relative Price Score (RPS) is a measure of stock price performance relative to the index (TOPIX) and is calculated monthly since listing and daily for the last 260 trading days. The score is based on the mean absolute deviation of the relative stock price and is calculated by comparing each monthly or daily deviation with the mean. Scores can be either negative or positive, however, as all companies are now on a comparable scale, outliers and changes can reveal short-term and long-term trading opportunities. In addition, company data is aggregated into Peer Group and Sectors Relative Price Scores which can be useful for sector allocation and timing. 
MARKET POLARISATION -  The percentage of the market that is either a positive or negative outlier also tends to be indicative of significant market moves. Currently, the percentage of companies that are Relative Price Score positive outliers it is a 27-year high at 4.4% while the percentage of negative outliers is at a 15-year high at 2.1%. The last period when the combined percentage of outliers exceeded the current level of 6% was during the TMT 'bubble' of 2000-1. In the past, such periods of extreme market concentration, especially in the positive outliers, have rarely persisted for more than one quarter and have usually coincided with market peaks. It remains to be seen if this time is different. 
THE "J NIFTY-FIFTY" - The momentum-driven concentration in the 50 most over-priced Japanese growth stocks has produced an average one-year ‘Nifty-Fifty’ performance of 60%. For portfolio managers willing to go along for this ride, the result has been a career-defining period of relative glory while value-orientated peers have suffered another year in the performance 'doghouse'.  The last chapter of this tale requires no spoiler alert. Currently, twenty-eight of our fifty have negative of flat earnings momentum, and eighteen have seen a decline in Relative Price Score in the last month. We look for further downside ahead in earnings and price momentum and will use the RPS as a guide to which Sectors, Peer Groups and companies are most at risk of price correction and suggest some oversold opportunities as replacements.

 SECTOR RECOMMENDATIONS 
LONG
Healthcare • Energy • Other Commercial Products • Utilities • Information Technology
SHORT
Multi-Industry • Metals • Chemicals • Autos • Machinery • Banks • Consumer Services

PEER GROUP RECOMMENDATIONS
LONG
Commercial Printing Services • Electric Power Utilities
SHORT
Musical Instruments • Personal Products • Management Consulting Services 
Amusement Parks &amp; Arcades 

COMPANY RECOMMENDATIONS
LONG
Dai Nippon Printing (7912 JP) • Chubu Electric Power (9502 JP)
SHORT
Shiseido (4911 JP) • Lasertec (6920 JP) • Funai Soken (9757 JP) 
 Yume No Machi Souzou Iinkai (2484 JP) • Yamaha (7951 JP)

RELATIVE PRICE SCORE PORTFOLIOS
Two following insights in the coming week will focus on constructing long and short portfolios based on Relative Price Score outliers.

Japan: Most Overbought & Most Oversold - The Relative Price Score

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

Equity Bottom-Up

We can see that LINE is eagerly trying to grasp as many opportunities and challenges as it can, now that it has achieved a huge and stable user base on which it can leverage, especially in its four major markets (Japan, Taiwan, Thailand and Indonesia). All plans and projects sound interesting and exciting. However, let us not forget that execution risk is high for LINE, a company with a short track record and already with a number of failed acquisitions and divestments. It is probably trying to…

We can see that LINE is eagerly trying to grasp as many opportunities and challenges as it can, now that it has achieved a huge and stable user base on which it can leverage, especially in its four major markets (Japan, Taiwan, Thailand and Indonesia). All plans and projects sound interesting and exciting. However, let us not forget that execution risk is high for LINE, a company with a short track record and already with a number of failed acquisitions and divestments. It is probably trying to…

LINE (3938 JP) - Running Fast, But Is It Actually Getting Anywhere?

Japan

Demae-can Co., Ltd. operates websites offering comprehensive delivery services.  The Company's websites allow users to order food, dry cleaning, and repair and recycling services through the Internet.

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Demae-Can Co., Ltd. (2484 JP)

Japan: Most Overbought & Most Oversold - The Relative Price Score

RELATIVE PRICE SCORE - The Japan Analytics' Relative Price Score (RPS) is a measure of stock price performance relative to the index (TOPIX) and is...

Campbell Gunn

LINE (3938 JP) - Running Fast, But Is It Actually Getting Anywhere?

We can see that LINE is eagerly trying to grasp as many opportunities and challenges as it can, now that it has achieved a huge and stable user...

Pelham Smithers Associates

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52-week Range

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