'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

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. POSITIVE MOVING AVERAGE OUTLIERS 28TH OCTOBER - Of the positive outlier identified last week, <a href="https://www.smartkarma.com/entities/8467" target="_blank" data-smartkarma-citation="entities:8467:1">Workman (7564 JP)</a> has since declined by 3% and is still overbought with a Relative Price Score of 4.65. The interim results released on 6th November show a slowing of earnings momentum scoring '4' compared to a score of '9' the previous quarter. We continue to advise profit taking. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/069/394/original/2018-11-11_15-13-17.png?1541916831" class="editor-image img-responsive" data-smartkarma-image-id="69394"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/069/395/original/2018-11-11_15-14-13.png?1541916865" class="editor-image img-responsive" data-smartkarma-image-id="69395"></figure><div class="content-caption">Source: Japan Analytics</div>NEGATIVE MOVING AVERAGE OUTLIERS 28TH OCTOBER - <a href="https://www.smartkarma.com/entities/9990" target="_blank" data-smartkarma-citation="entities:9990:1">Shima Seiki (6222 JP)</a> which was the most extreme negative outlier recovered 9% but is still the third-most oversold large cap. Of our so=called 'Fallen Angels', <a href="https://www.smartkarma.com/entities/4126" target="_blank" data-smartkarma-citation="entities:4126:1">Lasertec (6920 JP)</a> rose by 25% after good results and <a href="https://www.smartkarma.com/entities/9145" target="_blank" data-smartkarma-citation="entities:9145:1">Tokai Carbon (5301 JP)</a> recovered by 13%. Both remain overbought are likely to peak out in terms of their share price in the next few months. Of the other Fallen Angels, the best performance was from <a href="https://www.smartkarma.com/entities/14527" target="_blank" data-smartkarma-citation="entities:14527:1">Ulvac (6728 JP)</a> which rose 20%, and the worst was <a href="https://www.smartkarma.com/entities/15801" target="_blank" data-smartkarma-citation="entities:15801:1">Nippon Gas (8174 JP)</a> which rose 8%. <a href="https://www.smartkarma.com/entities/379" target="_blank" data-smartkarma-citation="entities:379:1">Sumco (3436 JP)</a> had the second-best two-week performance after <a href="https://www.smartkarma.com/entities/18107" target="_blank" data-smartkarma-citation="entities:18107:1">Advantest (6857 JP)</a> rising by 26% as it Q3 results were very strong, and their initial full-year forecast suggest FYOP will be 10% above TTM OP.  Our two 'bounce-but-fully-priced' stocks <a href="https://www.smartkarma.com/entities/13316" target="_blank" data-smartkarma-citation="entities:13316:1">M3 (2413 JP)</a> and <a href="https://www.smartkarma.com/entities/3294" target="_blank" data-smartkarma-citation="entities:3294:1">Pigeon (7956 JP)</a> rose by 3% and 11%, respectively although they remain 'Fully Priced'. <a href="https://www.smartkarma.com/entities/109" target="_blank" data-smartkarma-citation="entities:109:1">Idemitsu Kosan (5019 JP)</a> was unchanged over the period.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/069/396/original/2018-11-11_15-39-17.png?1541918405" class="editor-image img-responsive" data-smartkarma-image-id="69396"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/069/397/original/2018-11-11_15-39-55.png?1541918418" class="editor-image img-responsive" data-smartkarma-image-id="69397"></figure><div class="content-caption">Source: Japan Analytics</div><div class="content-highlight">In 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. </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. POSITIVE MOVING AVERAGE OUTLIERS 28TH OCTOBER - Of the positive outlier identified last week, Workman (7564 JP) has since declined by 3% and is still overbought with a Relative Price Score of 4.65. The interim results released on 6th November show a slowing of earnings momentum scoring '4' compared to a score of '9' the previous quarter. We continue to advise profit taking. Source: Japan AnalyticsNEGATIVE MOVING AVERAGE OUTLIERS 28TH OCTOBER - Shima Seiki (6222 JP) which was the most extreme negative outlier recovered 9% but is still the third-most oversold large cap. Of our so=called 'Fallen Angels', Lasertec (6920 JP) rose by 25% after good results and Tokai Carbon (5301 JP) recovered by 13%. Both remain overbought are likely to peak out in terms of their share price in the next few months. Of the other Fallen Angels, the best performance was from Ulvac (6728 JP) which rose 20%, and the worst was Nippon Gas (8174 JP) which rose 8%. Sumco (3436 JP) had the second-best two-week performance after Advantest (6857 JP) rising by 26% as it Q3 results were very strong, and their initial full-year forecast suggest FYOP will be 10% above TTM OP.  Our two 'bounce-but-fully-priced' stocks M3 (2413 JP) and Pigeon (7956 JP) rose by 3% and 11%, respectively although they remain 'Fully Priced'. Idemitsu Kosan (5019 JP) was unchanged over the period.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 - Results Driven

Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Equity Bottom-Up

Key drivers / Concerns<ul>
<li>SanBio is a one drug company</li>
<li>Key pipeline candidate, SB623 (allogeneic regenerative cell medicine for chronic motor deficit from ischemic stroke or traumatic brain injury, PhIIb) targeting $2b+ market opportunity
</li>
<li>Retained Japan rights for stroke and TBI and US rights for TBI, whereas, JD with Sumitomo Dainippon for stroke in the US</li>
<li>Potential Japan approval for TBI in FY20e (under conditional and time-limited expedited approval system) and the US approval for stroke in FY22e</li>
</ul>Investment thesis<ul>
<li>Crucial catalysts, for the key pipeline candidate SB623, upcoming in YE FY18 and FY19e</li>
<li>Targeting large patient population with high unmet need</li>
<li>Double digit royalty of ~17% from Sumitomo Dainippon from FY22e</li>
</ul>Valuation<ul><li>Our explicit revenue projection until 2030e, which includes probability adjusted SB623 (TBI) sales (Japan PoS 65%; US PoS 40%) and royalty income from Stroke indication (US PoS 50%), yields DCF based fair value of ¥ 4,300 / share.</li></ul>

Key drivers / Concerns
SanBio is a one drug company
Key pipeline candidate, SB623 (allogeneic regenerative cell medicine for chronic motor deficit from ischemic stroke or traumatic brain injury, PhIIb) targeting $2b+ market opportunity

Retained Japan rights for stroke and TBI and US rights for TBI, whereas, JD with Sumitomo Dainippon for stroke in the US
Potential Japan approval for TBI in FY20e (under conditional and time-limited expedited approval system) and the US approval for stroke in FY22e
Investment thesis
Crucial catalysts, for the key pipeline candidate SB623, upcoming in YE FY18 and FY19e
Targeting large patient population with high unmet need
Double digit royalty of ~17% from Sumitomo Dainippon from FY22e
ValuationOur explicit revenue projection until 2030e, which includes probability adjusted SB623 (TBI) sales (Japan PoS 65%; US PoS 40%) and royalty income from Stroke indication (US PoS 50%), yields DCF based fair value of ¥ 4,300 / share.

Thematic (Sector/Industry)

APATHY STRIKES AGAIN<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/686/original/2018-09-23_17-11-57.png?1537690346" class="editor-image img-responsive" data-smartkarma-image-id="64686"></figure><div class="content-caption">Source: Japan Analytics</div>THE APATHY INDICATOR - Our Fortnightly Update for 26th August highlighted the lack of market activity after the end of the results announcements over the previous six weeks. In recent years, similar periods of apathy had coincided with market turning points, usually to the upside. After an initial rally the following week, our 'apathy indicator' added another three signals before the market subsequently bottomed out on 7th September. Since then, Total Market Value has risen by 6.7%, TOPIX has had its best week in almost two years, both the 50 and 200-day moving averages were surpassed and, on Friday, the Value Traded Ratio had its fifth-best day of the year. Its 'party-time' here indeed.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/690/original/2018-09-23_17-44-03.png?1537692262" class="editor-image img-responsive" data-smartkarma-image-id="64690"></figure><div class="content-caption">Source: Japan Analytics</div>BREAKOUT - Much fanfare was also made over the fact that the <a href="https://www.smartkarma.com/entities/22909" target="_blank" data-smartkarma-citation="entities:22909:1">Nikkei 225 (NKY INDEX)</a> reached a 26-year high and broke out of nine-month and 22-year trading ranges. Although such positive news is always welcome for us Japan-only 'diehards', both TOPIX and TOPIX-US$ reached new 26-year highs in January, only to later fade away for the next seven months. New highs for both these indices are required to confirm that the December 1989 high is indeed again the target.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/701/original/2018-09-05_19-59-32.png?1537698981" class="editor-image img-responsive" data-smartkarma-image-id="64701"></figure><div class="content-caption">Source: Japan Analytics</div>GAIJIN WRONGFOOTED - As <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a> noted on 2nd September - <a href="https://www.smartkarma.com/insights/japan-flow-redux-foreign-investor-flows-still-matter-and-they-are-still-cyclical" target="_blank" data-smartkarma-citation="insights:23654">Foreign Investor Flows (Still) Matter, and They Are (Still) Cyclical</a>, foreign investor flows have recently been at 'the lower end of the cycle' and foreign investors tend to be pro-cyclical price-takers chasing returns on a net exposure basis driven by the relative performance of the US$TOPIX/S&amp;P 500 ratio. As we also noted in <a href="https://www.smartkarma.com/insights/japan-seasonality-sell-in-july-and-say-goodbye-please-come-back-on-culture-day" target="_blank" data-smartkarma-citation="insights:23682">Japan: Seasonality</a>, historically September is the second-worst performing month in the Japanese market calendar with October being the fourth-worst. Add some concerns over trade and auto tariffs to the mix and a portfolio underweighting of Japan at the start of this quarter was not going to alarm any trustees. Given all of the above and with a holiday this Monday, some sharp short-covering was also in evidence towards to end of last week in anticipation of more leisurely-timed long-only fund flows to come.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/704/original/2018-09-23_20-08-06.png?1537700901" class="editor-image img-responsive" data-smartkarma-image-id="64704"></figure><div class="content-caption">Source: Japan Analytics</div>CHEAP + UPSIDE TO FORECASTS - The last two weeks have taken the total market cap (ex REITs) to back above ¥700t, however, the trailing-twelve-month (TTM) PER is still below 15x. In aggregate the current forecasts for current year's Net Income are nearly ¥2t behind the TTM data, leaving scope for some market-boosting upward revisions in November as the (mostly interim) results are announced. Assuming upward revisions bring forecasts in line with our estimate the November TTM aggregate Net Income of ¥50t, the market PE at the January peak capitalisation would still be below 15x.  CAVEATS - Curbing the enthusiasm in the last paragraph are some macro caveats. Industrial production has slowed to nearly zero in recent months, and higher wage income is being mostly channelled into increased savings. For the first time in the post-WWII era, both profit's share and labour's share of GDP exceed 12%. Both cannot continue to rise in tandem indefinitely, and we would expect the former to turn down before the latter. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/705/original/2018-09-23_20-19-16.png?1537701582" class="editor-image img-responsive" data-smartkarma-image-id="64705"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/707/original/2018-09-23_20-34-21.png?1537702506" class="editor-image img-responsive" data-smartkarma-image-id="64707"></figure><div class="content-caption">Source: Japan Analytics</div>OUTLOOK - After a hectic four-day week and another shortened week to come, a pause would be welcome. The 5-day Relative Strength Index at 91 is at its highest level since 8th November 2017 and is in the first percentile of occurrences over the last three years. The 25-day Toraku advance-decline indicator is also nearing '120'. Although this is far from perfect as an indicator, recent peaks and troughs have coincided with Toraku outliers. Two weeks ago, we suggested the market would rise and Yen would fall 'into the month end absent any adverse developments on the trade front'. With newly-re-elected PM Abe in New York this week, we expect another quiet week for the continuing (now sector-specific) Japan-US trade negotiations. Further Yen weakness would limit any short-term profit-taking, and there are still enough global portfolios underweight Japan to buy the coming dip and support rolling our forecast forward until month-end.SECTOR RECOMMENDATIONS - Our sector recommendations have fared less well over the last two weeks. Our most-preferred marginally out-performed our least-preferred with the gains in Energy and Telecoms offsetting 'losses' from underweights in Utilities, Machinery, Real Estate and Autos and overweights in Information Technology and Other Commercial Products. COMPANIES - Our results, revisions and stock performance reviews below contain short comments on <a href="https://www.smartkarma.com/entities/11720" target="_blank" data-smartkarma-citation="entities:11720:1">Kikkoman (2801 JP)</a>, <a href="https://www.smartkarma.com/entities/4102" target="_blank" data-smartkarma-citation="entities:4102:1">Nissan Chemical (4021 JP)</a> and <a href="https://www.smartkarma.com/entities/1496" target="_blank" data-smartkarma-citation="entities:1496:1">Showa Denko (4004 JP)</a>.

APATHY STRIKES AGAINSource: Japan AnalyticsTHE APATHY INDICATOR - Our Fortnightly Update for 26th August highlighted the lack of market activity after the end of the results announcements over the previous six weeks. In recent years, similar periods of apathy had coincided with market turning points, usually to the upside. After an initial rally the following week, our 'apathy indicator' added another three signals before the market subsequently bottomed out on 7th September. Since then, Total Market Value has risen by 6.7%, TOPIX has had its best week in almost two years, both the 50 and 200-day moving averages were surpassed and, on Friday, the Value Traded Ratio had its fifth-best day of the year. Its 'party-time' here indeed.Source: Japan AnalyticsBREAKOUT - Much fanfare was also made over the fact that the Nikkei 225 (NKY INDEX) reached a 26-year high and broke out of nine-month and 22-year trading ranges. Although such positive news is always welcome for us Japan-only 'diehards', both TOPIX and TOPIX-US$ reached new 26-year highs in January, only to later fade away for the next seven months. New highs for both these indices are required to confirm that the December 1989 high is indeed again the target.Source: Japan AnalyticsGAIJIN WRONGFOOTED - As Travis Lundy noted on 2nd September - Foreign Investor Flows (Still) Matter, and They Are (Still) Cyclical, foreign investor flows have recently been at 'the lower end of the cycle' and foreign investors tend to be pro-cyclical price-takers chasing returns on a net exposure basis driven by the relative performance of the US$TOPIX/S&amp;P 500 ratio. As we also noted in Japan: Seasonality, historically September is the second-worst performing month in the Japanese market calendar with October being the fourth-worst. Add some concerns over trade and auto tariffs to the mix and a portfolio underweighting of Japan at the start of this quarter was not going to alarm any trustees. Given all of the above and with a holiday this Monday, some sharp short-covering was also in evidence towards to end of last week in anticipation of more leisurely-timed long-only fund flows to come.Source: Japan AnalyticsCHEAP + UPSIDE TO FORECASTS - The last two weeks have taken the total market cap (ex REITs) to back above ¥700t, however, the trailing-twelve-month (TTM) PER is still below 15x. In aggregate the current forecasts for current year's Net Income are nearly ¥2t behind the TTM data, leaving scope for some market-boosting upward revisions in November as the (mostly interim) results are announced. Assuming upward revisions bring forecasts in line with our estimate the November TTM aggregate Net Income of ¥50t, the market PE at the January peak capitalisation would still be below 15x.  CAVEATS - Curbing the enthusiasm in the last paragraph are some macro caveats. Industrial production has slowed to nearly zero in recent months, and higher wage income is being mostly channelled into increased savings. For the first time in the post-WWII era, both profit's share and labour's share of GDP exceed 12%. Both cannot continue to rise in tandem indefinitely, and we would expect the former to turn down before the latter. Source: Japan AnalyticsOUTLOOK - After a hectic four-day week and another shortened week to come, a pause would be welcome. The 5-day Relative Strength Index at 91 is at its highest level since 8th November 2017 and is in the first percentile of occurrences over the last three years. The 25-day Toraku advance-decline indicator is also nearing '120'. Although this is far from perfect as an indicator, recent peaks and troughs have coincided with Toraku outliers. Two weeks ago, we suggested the market would rise and Yen would fall 'into the month end absent any adverse developments on the trade front'. With newly-re-elected PM Abe in New York this week, we expect another quiet week for the continuing (now sector-specific) Japan-US trade negotiations. Further Yen weakness would limit any short-term profit-taking, and there are still enough global portfolios underweight Japan to buy the coming dip and support rolling our forecast forward until month-end.SECTOR RECOMMENDATIONS - Our sector recommendations have fared less well over the last two weeks. Our most-preferred marginally out-performed our least-preferred with the gains in Energy and Telecoms offsetting 'losses' from underweights in Utilities, Machinery, Real Estate and Autos and overweights in Information Technology and Other Commercial Products. COMPANIES - Our results, revisions and stock performance reviews below contain short comments on Kikkoman (2801 JP), Nissan Chemical (4021 JP) and Showa Denko (4004 JP).

TURNING POINT - Despite the last four trading days being 'up', the Japanese equity market composite fell by 0.6% over the last two weeks. New 52-week lows outnumbered new highs by 6.7:1 and new lows have exceeded new highs for the last sixteen days. This post-results 'malaise' is most noticeable in the lack of market activity.  Four of the last six trading days have seen the Value Traded/Total Market Value ratio fall below 30 basis points.  Other than at the turn of the year, such levels of trading 'apathy' (marked▲on the chart below) usually coincide with changes in market direction which, in current circumstances would suggest some upside from current levels.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/735/original/2018-08-25_21-33-47.png?1535271873" class="editor-image img-responsive" data-smartkarma-image-id="61735"></figure><div class="content-caption">Source: Japan Analytics</div>SECTOR TRENDS - Only seven sectors rose by more than 1% in the last two weeks, led by Commercial Services, Multi-Industry, Media and Information Technology and only eight are up over three months. Overall the market composite has fallen by 2.9% since the end of May.  Twelve sectors have decreased by more than 1% since 10th August with Metals, Telecommunications, Autos and Consumer Services all down by more than 2%. Over both periods, and in all regards, the Energy sector is the outlier and remains attractively priced at below book value and on 8x TTM Net Income. RESULTS &amp; REVISIONS - Only 213 results and revision announcements occurred in the last two weeks, with <a href="https://www.smartkarma.com/entities/109" target="_blank" data-smartkarma-citation="entities:109:1">Idemitsu Kosan (5019 JP)</a>, <a href="https://www.smartkarma.com/entities/4909" target="_blank" data-smartkarma-citation="entities:4909:1">Hikari Tsushin (9435 JP)</a>, <a href="https://www.smartkarma.com/entities/14750" target="_blank" data-smartkarma-citation="entities:14750:1">Rizap (2928 JP)</a>, <a href="https://www.smartkarma.com/entities/24540" target="_blank" data-smartkarma-citation="entities:24540:1">SanBio (4592 JP)</a> <a href="https://www.smartkarma.com/entities/20495" target="_blank" data-smartkarma-citation="entities:20495:1">Amuse (4301 JP)</a> and <a href="https://www.smartkarma.com/entities/19550" target="_blank" data-smartkarma-citation="entities:19550:1">Open House (3288 JP)</a> being the most impactful in terms of changes in scoring.PRICE SCORE &amp; VALUATION - Banks continue to be 'Oversold' and 'Deep Value', while Commercial and Consumer Services are both 'Overbought' and 'Fully Priced'. Information Technology, a preferred sector, is now 'Fully Priced' and is close to being 'Overbought' but we would hold current positions for the time being. OUTLOOK - If the market were to see a rebound, the catalyst could be a weaker currency or a new post-re-election policy platform from PM Abe. Indeed, last week's statement by Chief Cabinet Secretary Suga that mobile phone charges need to fall by 40% suggests a more pro-active and populist third term. In any event, some mean reversion in current sector trends is likely.

TURNING POINT - Despite the last four trading days being 'up', the Japanese equity market composite fell by 0.6% over the last two weeks. New 52-week lows outnumbered new highs by 6.7:1 and new lows have exceeded new highs for the last sixteen days. This post-results 'malaise' is most noticeable in the lack of market activity.  Four of the last six trading days have seen the Value Traded/Total Market Value ratio fall below 30 basis points.  Other than at the turn of the year, such levels of trading 'apathy' (marked▲on the chart below) usually coincide with changes in market direction which, in current circumstances would suggest some upside from current levels.Source: Japan AnalyticsSECTOR TRENDS - Only seven sectors rose by more than 1% in the last two weeks, led by Commercial Services, Multi-Industry, Media and Information Technology and only eight are up over three months. Overall the market composite has fallen by 2.9% since the end of May.  Twelve sectors have decreased by more than 1% since 10th August with Metals, Telecommunications, Autos and Consumer Services all down by more than 2%. Over both periods, and in all regards, the Energy sector is the outlier and remains attractively priced at below book value and on 8x TTM Net Income. RESULTS &amp; REVISIONS - Only 213 results and revision announcements occurred in the last two weeks, with Idemitsu Kosan (5019 JP), Hikari Tsushin (9435 JP), Rizap (2928 JP), SanBio (4592 JP) Amuse (4301 JP) and Open House (3288 JP) being the most impactful in terms of changes in scoring.PRICE SCORE &amp; VALUATION - Banks continue to be 'Oversold' and 'Deep Value', while Commercial and Consumer Services are both 'Overbought' and 'Fully Priced'. Information Technology, a preferred sector, is now 'Fully Priced' and is close to being 'Overbought' but we would hold current positions for the time being. OUTLOOK - If the market were to see a rebound, the catalyst could be a weaker currency or a new post-re-election policy platform from PM Abe. Indeed, last week's statement by Chief Cabinet Secretary Suga that mobile phone charges need to fall by 40% suggests a more pro-active and populist third term. In any event, some mean reversion in current sector trends is likely. 

INTRODUCTION - The final part of our Results and Forecast/Revision Scores review will look at the leading and lagging performers and forecasters among larger and middle capitalisation companies in Japan based on their most recent quarterly results and forecasts. The data series covers over 160,000 quarterly results and 120,000 initial forecasts or forecasts revisions. The scores are calculated using the most recent eight quarters of data for revenues, operating income and operating margin and measure for each metric the rate, degree and consistency of change. Each score ranges from a maximum of +30 to a minimum of -30 for each period. Please refer to Part 1 <a href="https://www.smartkarma.com/insights/japan-scoring-results-forecasts-earnings-momentum-slowing-weaker-required" target="_blank" data-smartkarma-citation="insights:20302">Japan: Scoring Results &amp; Forecasts</a> for more details on the scoring methodology. The tables below give the top and bottom five companies in each category.RESULTS SCORE TOP 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/547/original/2018-05-27_18-38-25.png?1527413921" class="editor-image img-responsive" data-smartkarma-image-id="53547"></figure>RESULTS SCORE BOTTOM 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/548/original/2018-05-27_18-41-29.png?1527414102" class="editor-image img-responsive" data-smartkarma-image-id="53548"></figure><div style="text-align: left;" class="content-caption">Legend: ▲ and ▼ arrows indicate Score changes in the top and bottom ten percent, respectively. The Relative Price Score measures the difference between the current relative price and the mean absolute deviation of relative prices since listing which allows for a comparison of all companies on the same absolute scale. We consider differences in the top or bottom percentiles of historical observations to be 'Overbought' and 'Oversold' and these states mark them "•" and "+", respectively.  Valuation 'QUADrants' group companies into the top and bottom 20% of TTM PER and PBR ranges and categorise companies that are outliers in both into four quadrants: "FP" = Fully Priced, "SP" = Speculative, "MT" = Mature and "DV" = Deep Value. Rows are colour-coded based on the sector to which each company belongs. </div>FORECAST/REVISION SCORE TOP 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/551/original/2018-05-27_18-47-10.png?1527414449" class="editor-image img-responsive" data-smartkarma-image-id="53551"></figure>FORECAST/REVISION SCORE BOTTOM 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/552/original/2018-05-27_18-47-59.png?1527414502" class="editor-image img-responsive" data-smartkarma-image-id="53552"></figure><div style="text-align: left;" class="content-caption">Forecasts older than 180 days are excluded. The Forecast Accuracy Score is a measure of a company’s forecast accuracy-very time and is derived from the cumulative deviations of the Revenue and Operating Income forecasts from the year-end results. 100 is a perfect score; there is no minimum score. The fewer and the more accurate the forecasts, the higher the score.  A score of over 70 indicates that the current forecast is likely to be achieved. Where there is insufficient data, or if the company has not made any forecasts in the last five years, the column entry will be blank. </div>FORECAST/REVISION SCORE &amp; RESULTS SCORE DIFFERENCE TOP 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/555/original/2018-05-27_18-53-42.png?1527414845" class="editor-image img-responsive" data-smartkarma-image-id="53555"></figure>FORECAST/REVISION SCORE &amp; RESULTS SCORE DIFFERENCE BOTTOM 5<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/053/556/original/2018-05-27_18-54-24.png?1527414885" class="editor-image img-responsive" data-smartkarma-image-id="53556"></figure><div class="content-caption">All tables &gt; Source: Japan Analytics</div>In addition, we provide five actionable longs and five actionable shorts where we see a significant divergence between the business performance and relative prices.

INTRODUCTION - The final part of our Results and Forecast/Revision Scores review will look at the leading and lagging performers and forecasters among larger and middle capitalisation companies in Japan based on their most recent quarterly results and forecasts. The data series covers over 160,000 quarterly results and 120,000 initial forecasts or forecasts revisions. The scores are calculated using the most recent eight quarters of data for revenues, operating income and operating margin and measure for each metric the rate, degree and consistency of change. Each score ranges from a maximum of +30 to a minimum of -30 for each period. Please refer to Part 1 Japan: Scoring Results &amp; Forecasts for more details on the scoring methodology. The tables below give the top and bottom five companies in each category.RESULTS SCORE TOP 5RESULTS SCORE BOTTOM 5Legend: ▲ and ▼ arrows indicate Score changes in the top and bottom ten percent, respectively. The Relative Price Score measures the difference between the current relative price and the mean absolute deviation of relative prices since listing which allows for a comparison of all companies on the same absolute scale. We consider differences in the top or bottom percentiles of historical observations to be 'Overbought' and 'Oversold' and these states mark them "•" and "+", respectively.  Valuation 'QUADrants' group companies into the top and bottom 20% of TTM PER and PBR ranges and categorise companies that are outliers in both into four quadrants: "FP" = Fully Priced, "SP" = Speculative, "MT" = Mature and "DV" = Deep Value. Rows are colour-coded based on the sector to which each company belongs. FORECAST/REVISION SCORE TOP 5FORECAST/REVISION SCORE BOTTOM 5Forecasts older than 180 days are excluded. The Forecast Accuracy Score is a measure of a company’s forecast accuracy-very time and is derived from the cumulative deviations of the Revenue and Operating Income forecasts from the year-end results. 100 is a perfect score; there is no minimum score. The fewer and the more accurate the forecasts, the higher the score.  A score of over 70 indicates that the current forecast is likely to be achieved. Where there is insufficient data, or if the company has not made any forecasts in the last five years, the column entry will be blank. FORECAST/REVISION SCORE &amp; RESULTS SCORE DIFFERENCE TOP 5FORECAST/REVISION SCORE &amp; RESULTS SCORE DIFFERENCE BOTTOM 5All tables &gt; Source: Japan AnalyticsIn addition, we provide five actionable longs and five actionable shorts where we see a significant divergence between the business performance and relative prices.

Japan: Scoring Results & Forecasts - Part 3 - Company Winners & Losers

Japan

Sanbio Co Ltd researches, develops, manufactures, and sells regenerative cell re lated pharmaceutical products.

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SanBio Co Ltd (4592 JP)

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Key drivers / Concerns SanBio is a one drug company Key pipeline candidate, SB623 (allogeneic regenerative cell medicine for chronic motor deficit...

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APATHY STRIKES AGAINTHE APATHY INDICATOR - Our Fortnightly Update for 26th August highlighted the lack of market activity after the end of the...

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TURNING POINT - Despite the last four trading days being 'up', the Japanese equity market composite fell by 0.6% over the last two weeks. New...

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Japan: Scoring Results & Forecasts - Part 3 - Company Winners & Losers

INTRODUCTION - The final part of our Results and Forecast/Revision Scores review will look at the leading and lagging performers and forecasters...

Campbell Gunn

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