Alternative Data - An Evolving Weapon for Active Managers (Shiseido, Kose, Pola Orbis)

Negative Shiseido, Kose and Pola Orbis

We analysed the top five Japanese cosmetics companies predominantly focusing on fundamental investment research principles. And based on our analysis we are negative on Shiseido, Kose and Pola Orbis, with the last two names being our top picks to short. We consider Shiseido to be short term neutral but believe the name is over-owned and growth deceleration exposes the name to significant downside risk from flows.

Our long-term views on individual companies are mainly based on fundamental investment research principles and we have used POS data to track any changes in the trends behind our fundamentals based long term view. The frequency of POS data is much higher than traditional IR data and POS also breaks the data into extremely granular levels, meaning the information derived from POS is far more than what the traditional IR provides. Therefore, using POS we have developed systems to monitor the changes in our investment thesis at micro levels and also at a much higher frequency. Furthermore, we have also used POS data to forecast the company performance in its upcoming earnings. Lastly, the analysis of POS data helps us mitigate any surprises and potentially turn trend reversals to our advantage.

We provide our detailed views on Shiseido, Kose and Pola Orbis below.