'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)

CYCLICAL SECTORS RALLY WITH THE MARKET - Japanese equities have rallied 3.6% over the last two weeks, and the market composite is now flat since the end of April. Mean reversion was widespread and the range from worst to best three-month change narrowed from 22.5% to 18.1%. Banks, Energy, Chemicals, and Metals led, while REITs, Media,Telcom and Retail lagged. Domestic growth sectors (Internet, Commercial Services, Information Technology and Healthcare) are still well ahead over three months…

CYCLICAL SECTORS RALLY WITH THE MARKET - Japanese equities have rallied 3.6% over the last two weeks, and the market composite is now flat since the end of April. Mean reversion was widespread and the range from worst to best three-month change narrowed from 22.5% to 18.1%. Banks, Energy, Chemicals, and Metals led, while REITs, Media,Telcom and Retail lagged. Domestic growth sectors (Internet, Commercial Services, Information Technology and Healthcare) are still well ahead over three months…

Japan Fortnightly Update: Banks to Neutral/Utilities to Negative - Results Momentum Still Slowing

RELATIVE PRICE SCORE LONG PORTFOLIOS - Our recent insight <a href="https://www.smartkarma.com/insights/japan-most-overbought-most-oversold-the-relative-price-score" target="_blank" data-smartkarma-citation="insights:21149">Japan: Most Overbought &amp; Most Oversold - The Relative Price Score</a> introduced our methodology for identifying overbought and oversold outliers based on their Relative Price Score (RPS).  This insight uses the RPS to generate a portfolio of long ideas based on changes in the monthly closing Relative Price Scores. <div class="content-highlight">
THE 2016 PORTFOLIO 
<ul>
<li>The 2016 average return was 40% for a 12-month holding period, and if held to the most recent peak, returns would have been significantly higher</li>
<li>21 of the 48 stocks had a market capitalisation at the time of entry of more than ¥100b and the average 12-month return for this group was 41%</li>
<li>17 positions were in Regional Banks which produced an average 12-month return of 19%</li>
<li>18 positions saw a greater than 10% decline after entry, however, this group produced an average 12-month return of 23%</li>
<li>Seven stocks declined over the period and produced an average 'loss' of 7% </li>
<li>The strategy successfully identified the opportunity in the Energy sector in early 2016 with <a href="https://www.smartkarma.com/entities/109" target="_blank" data-smartkarma-citation="entities:109:1">Idemitsu Kosan (5019 JP)</a> and <a href="https://www.smartkarma.com/entities/2840" target="_blank" data-smartkarma-citation="entities:2840:1">Modec (6269 JP)</a> and later, but less productively, <a href="https://www.smartkarma.com/entities/12219" target="_blank" data-smartkarma-citation="entities:12219:1">Japan Petroleum Exploration (1662 JP)</a>
</li>
<li>Other successful larger capitalisation positions were <a href="https://www.smartkarma.com/entities/1496" target="_blank" data-smartkarma-citation="entities:1496:1">Showa Denko (4004 JP)</a> and <a href="https://www.smartkarma.com/entities/15998" target="_blank" data-smartkarma-citation="entities:15998:1">Mitsui Mining &amp; Smelting (5706 JP)</a>
</li>
<li>The least successful position was <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba (6502 JP)</a> which is still far from being an RPS 'long'</li>
</ul>
</div><div class="content-highlight">
THE 2017 PORTFOLIO
<ul>
<li>The average return for the first half of 2017 was 28% for a subsequent 12-month holding period. If held to the most recent peak, the average return would have grown to 50%</li>
<li>9 of the 17 stocks had a market capitalisation at the time of entry of more than ¥100b and the average 12-month return for this group was only 6% - much of this was due to the six Electric Power companies which lost 2% on average</li>
<li>Only two Regional Banks appear on the list - most Regionals are now deeply oversold</li>
<li>The best performing larger capitalisation position was <a href="https://www.smartkarma.com/entities/391" target="_blank" data-smartkarma-citation="entities:391:1">Sharp (6753 JP)</a> although this is now back in oversold territory</li>
</ul>
</div><div class="content-highlight">
THE CURRENT PORTFOLIO
<ul>
<li>The current portfolio is averaging a return of 19%, although most of the returns so far are from micro-caps</li>
<li>For companies with a market capitalisation of over ¥50b, double-digit gains-to-peak have been achieved from positions in <a href="https://www.smartkarma.com/entities/292" target="_blank" data-smartkarma-citation="entities:292:1">Electric Power Dev  (9513 JP)</a>, <a href="https://www.smartkarma.com/entities/9797" target="_blank" data-smartkarma-citation="entities:9797:1">Hyakugo Bank (8368 JP)</a>, <a href="https://www.smartkarma.com/entities/18871" target="_blank" data-smartkarma-citation="entities:18871:1">Isetan Mitsukoshi (3099 JP)</a>, <a href="https://www.smartkarma.com/entities/10383" target="_blank" data-smartkarma-citation="entities:10383:1">Global One Reit (8958 JP)</a>, <a href="https://www.smartkarma.com/entities/22762" target="_blank" data-smartkarma-citation="entities:22762:1">GMO Financial (7177 JP)</a>, <a href="https://www.smartkarma.com/entities/17934" target="_blank" data-smartkarma-citation="entities:17934:1">Shikoku Electric Power (9507 JP)</a> , <a href="https://www.smartkarma.com/entities/4152" target="_blank" data-smartkarma-citation="entities:4152:1">Kadokawa Dwango (9468 JP)</a> and <a href="https://www.smartkarma.com/entities/8905" target="_blank" data-smartkarma-citation="entities:8905:1">Nippon Chemi Con (6997 JP)</a>
</li>
<li>The most represented Sectors/Peer Groups are Utilities (6), Auto-Parts (4), REITs (4) and Commercial Printing (2)</li>
<li>The best position in the last twelve months has been <a href="https://www.smartkarma.com/entities/2935" target="_blank" data-smartkarma-citation="entities:2935:1">Aigan (9854 JP)</a> with a return-to-peak of 186%</li>
<li>The largest companies by market capitalisation in the current portfolio are <a href="https://www.smartkarma.com/entities/13613" target="_blank" data-smartkarma-citation="entities:13613:1">Mitsubishi Heavy Industries (7011 JP)</a>, <a href="https://www.smartkarma.com/entities/14574" target="_blank" data-smartkarma-citation="entities:14574:1">Chubu Electric Power (9502 JP)</a>, <a href="https://www.smartkarma.com/entities/19388" target="_blank" data-smartkarma-citation="entities:19388:1">Dai Nippon Printing (7912 JP)</a> and <a href="https://www.smartkarma.com/entities/18907" target="_blank" data-smartkarma-citation="entities:18907:1">Kansai Electric Power (9503 JP)</a>
</li>
</ul>
</div>

RELATIVE PRICE SCORE LONG PORTFOLIOS - Our recent insight Japan: Most Overbought &amp; Most Oversold - The Relative Price Score introduced our methodology for identifying overbought and oversold outliers based on their Relative Price Score (RPS).  This insight uses the RPS to generate a portfolio of long ideas based on changes in the monthly closing Relative Price Scores. 
THE 2016 PORTFOLIO 

The 2016 average return was 40% for a 12-month holding period, and if held to the most recent peak, returns would have been significantly higher
21 of the 48 stocks had a market capitalisation at the time of entry of more than ¥100b and the average 12-month return for this group was 41%
17 positions were in Regional Banks which produced an average 12-month return of 19%
18 positions saw a greater than 10% decline after entry, however, this group produced an average 12-month return of 23%
Seven stocks declined over the period and produced an average 'loss' of 7% 
The strategy successfully identified the opportunity in the Energy sector in early 2016 with Idemitsu Kosan (5019 JP) and Modec (6269 JP) and later, but less productively, Japan Petroleum Exploration (1662 JP)

Other successful larger capitalisation positions were Showa Denko (4004 JP) and Mitsui Mining &amp; Smelting (5706 JP)

The least successful position was Toshiba (6502 JP) which is still far from being an RPS 'long'


THE 2017 PORTFOLIO

The average return for the first half of 2017 was 28% for a subsequent 12-month holding period. If held to the most recent peak, the average return would have grown to 50%
9 of the 17 stocks had a market capitalisation at the time of entry of more than ¥100b and the average 12-month return for this group was only 6% - much of this was due to the six Electric Power companies which lost 2% on average
Only two Regional Banks appear on the list - most Regionals are now deeply oversold
The best performing larger capitalisation position was Sharp (6753 JP) although this is now back in oversold territory


THE CURRENT PORTFOLIO

The current portfolio is averaging a return of 19%, although most of the returns so far are from micro-caps
For companies with a market capitalisation of over ¥50b, double-digit gains-to-peak have been achieved from positions in Electric Power Dev  (9513 JP), Hyakugo Bank (8368 JP), Isetan Mitsukoshi (3099 JP), Global One Reit (8958 JP), GMO Financial (7177 JP), Shikoku Electric Power (9507 JP) , Kadokawa Dwango (9468 JP) and Nippon Chemi Con (6997 JP)

The most represented Sectors/Peer Groups are Utilities (6), Auto-Parts (4), REITs (4) and Commercial Printing (2)
The best position in the last twelve months has been Aigan (9854 JP) with a return-to-peak of 186%
The largest companies by market capitalisation in the current portfolio are Mitsubishi Heavy Industries (7011 JP), Chubu Electric Power (9502 JP), Dai Nippon Printing (7912 JP) and Kansai Electric Power (9503 JP)




Japan: Relative Price Score Long Portfolios

Japan

NIPPON CHEMI-CON CORPORATION manufactures and markets condensers, electronic components, and circuit products.  The Company's product include aluminum electronic capacitors, tantalum electronic capacitors, ceramic capacitors, film capacitors, ceramic varistors, sensors, and connectors.

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Nippon Chemi Con (6997 JP)

Japan Fortnightly Update: Banks to Neutral/Utilities to Negative - Results Momentum Still Slowing

CYCLICAL SECTORS RALLY WITH THE MARKET - Japanese equities have rallied 3.6% over the last two weeks, and the market composite is now flat since...

Campbell Gunn

Japan: Relative Price Score Long Portfolios

RELATIVE PRICE SCORE LONG PORTFOLIOS - Our recent insight Japan: Most Overbought & Most Oversold - The Relative Price Score introduced our...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)