Japanese stock report - Nippon Telegraph and Telephone

JAP

Nippon Telegraph and Telephone falls for a second consecutive day, a two-day fall of 0.4% October 20, 2017 15:00 JST

NEWS BITES - JAPAN

Nippon Telegraph and Telephone Corp. (TO:9432), the largest Information & communication company by market cap in the Japan, has fallen JPY14.0 (0.3%) for a second consecutive day on Friday. This brought its two-day fall to JPY19.0 (0.4%), compared with the Nikkei 225 Index which rose 94.6 points (0.4%) in the two days for a relative price change of -0.8%. Cumulative volume in the 2 days was 0.9 times the average 2-day volume of 3.6 million shares. The stock last traded at JPY5,303.0.

NIPPON TELEGRAPH AND TELEPHONE ISSUED 3 NEW PATENTS IN THE WEEK OF OCTOBER 17, 2017

Nippon Telegraph and Telephone (9432) has been issued 3 new patents by the USPTO and EPO.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Technicals, Overbought/Bearish/Resistance Signals

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Momentum, Moving Annual Return, Beta & Alpha, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 PATENTS

SECTION 8 STOCK BUZZ

SECTION 1 NIPPON TELEGRAPH AND TELEPHONE BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 2.5%, divided by average yield of dividend yielding stocks in the Nikkei 225 Index of 3.1% is 82.5%. This suggests the stock is overvalued in dividend yield terms.

+ Net profit margin has averaged 7.5% in the last 3 years. This is lower than the sector average of 7.8% and suggests a low margin of safety.

1.2 Technicals:

Downtrend: The stock dropped on high volatility today.

1.3 Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -16.3, suggesting the price is close to its 14-day high of JPY5,344.0.

+ The Stochastic indicator of 87.9 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

SECTION 2 NIPPON TELEGRAPH AND TELEPHONE BULLISH SIGNALS

2.1 Fundamentals:

+ The P/E of 12.1 multiplied by the P/NTA of 1.8 is 22.1. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.5. Compared with the rest of the market the stock is undervalued.

+ Total Liabilities/EBITDA of 3.2 is comfortably below the Joseph Piotroski benchmark of 5.

+ Interest cover defined by EBIT/I is 41.5 times. This indicates it is less leveraged.

+ As per the Du Pont analysis, Return on Equity of 14.6% is better than sector average of 12.8%. This is computed as net profit margin of 9.3% times asset turnover [sales/assets] of 0.54 times leverage factor [total assets/shareholders' equity] of 2.3.

2.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 12.1 [15.6]. We estimate Nippon Telegraph and Telephone stock is trading at a current year P/E of 11.1 and a forward year P/E of 8.8.

+ Price/Sales of 1 [1.4]. We estimate Nippon Telegraph and Telephone stock is trading at a current year Price/Sales of 1 and a forward year Price/Sales of 0.9.

+ Price to Book of 1.8 [5.2]. We estimate Nippon Telegraph and Telephone stock is trading at a current year Price to Book of 2 and a forward year Price to Book of 2.1.

+ Return on Equity 14.6% [13.0%].

+ Price to EBITDA of 3.7 [8.2].

2.3 Technicals:

+ The 2.2% discount to 12-month high of JPY5,421.53 against the 31.0% premium to 12-month low of JPY4,047.35 suggests the stock continues to push for new highs.

+ The present value of JPY1,000 (PV1000) invested one year ago in Nippon Telegraph and Telephone is JPY1,189, comprising a capital gain of JPY157 and dividend reinvested of JPY31.

PV10001-week1-month1-year
9432.TO1,0101,0651,189
Nikkei 225 Index1,0141,0541,245

+ The present value of JPY1,000 (PV1000) invested twenty years ago in Nippon Telegraph and Telephone is JPY1,471, including a capital gain of JPY282 and dividend reinvested of JPY189.

+ 20 years Multiplier in JPY = 1.471x

+ Compound Annual Growth Rate (CAGR) in JPY = 1.9%

Present Value of USD1,000 invested 20 years ago:

+ The present value of USD1,000 (PV1000) invested twenty years ago in Nippon Telegraph and Telephone is $US1,575, including a capital gain of $US372 and dividend reinvested of $US203.

+ 20 years ago USD 1 equalled JPY 120.4819

+ 20 years Multiplier in USD = 1.575x

+ Compound Annual Growth Rate (CAGR) in USD = 2.3%

Oct 20, 2017: USD 1 equals JPY 112.55

2.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverJPY17.3 billion (US$154.1 million)In Top 1%
EBITDA Margin %26.6In Top 7%
Volatility %0.8In Top Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 3,270,000 shares worth JPY17.3 billion (US$154.1 million) traded today. In the past week, volume was 0.9 times average and the shares were up 1.0%. The volume was 0.9 times the average daily trading volume of 3.6 million shares.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 15%.

9432Close (JPY)Dividends (JPY)Capital Gain %% YieldAnnual Return %
Oct 205,30313515.72.918.7
1 Yr ago4,58212012.8315.8
2 Yrs ago4,060.699545.73.449.1
3 Yrs ago2,786.83-15-15.0
4 Yrs ago2,422.528038.94.643.5

Close 5 years ago JPY1,744.07

3.3 Beta & Alpha:

+ Beta: the Beta of Nippon Telegraph and Telephone stock is 0.4. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

+ Alpha: the Alpha of the stock is 4.7. The actual return of 15.69% exceeded the expected return of 11.0%, reflecting outperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 40.1% (or a turnover period of 2 years 6 months). This average length of ownership of the stock at 2.3 times the average holding period of 1 year 40 days for stocks in the Nikkei 225 Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4 RANKING

4.1 Global Rank [out of 47,820 stocks] and Rank in the Asia Region [out of 22,267 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)98.9B10214
Total Assets (US$)188.8B33774
Revenue (US$)101.4B6522
Net Profit (US$)7.1B10428
Return on Equity %14.67,7533,863
Net Profit Margin %9.311,9526,114
Price to Book1.817,9529,939
Price/Earnings12.16,8823,618
Yield %2.59,7824,047
PV$1000 (1Year) US$*1,09620,6319,384
US$* Change (1Year) %6.620,7869,540

* 1 year ago USD 1 = JPY 103.27

Oct 20, 2017: USD 1 equals JPY 112.55

4.2 Independent Ratings

Nippon Telegraph and Telephone Corp. is the 36th largest by revenue in the FT Global 500.

It is the 54th largest by revenue in the Forbes Global 2000.

It was ranked 99 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 12.9% in Waste productivity, 6.6% in Energy productivity and 4.9% in Carbon productivity.

It is placed 2419/3465 in BSS News Bites' ranking of Japan performers in the past year, a percentile ranking of 31.

SECTION 5 NIPPON TELEGRAPH AND TELEPHONE FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)101.5102.898.9
Pretax (USD B)13.611.89.5
Net (USD B)7.16.64.6
EPS (JPY)--118.425

Sales was up 2.7% from US$98.9 billion to US$101.5 billion and Net profit was up 54.4% from US$4.6 billion to US$7.1 billion.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (JPY)
20 Oct 2017135
20 Oct 2016120
20 Oct 201595

SECTION 6 NIPPON TELEGRAPH AND TELEPHONE PROFILE

6.1 Activities

Nippon Telegraph and Telephone (NTT) is a Japan-based telecommunications provider offering fixed and mobile voice related services, Internet protocol (IP)/packet communications services and system integration services. The Company primarily operates in five business segments. The regional communications segment is engaged in the provision of domestic intra-prefectural communication services and incidental services. The long distance and international communications segment is engaged in the provision of domestic inter-prefectural and international communication services and incidental services. The mobile communications segment is engaged in the provision of mobile phones services and other related services. The data communications segment is engaged in the provision of system integration and network system services, among others. The others segment is engaged in the city development and financial businesses.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorTelecommunications Services
Industry GroupTelecommunications Services
Economic SectorTelecommunication Services

6.3 Top Management

The chairman is Satoshi Miura.

6.4 Issued Capital

Based on 2,100,000,000 issued shares the market capitalisation is JPY11,136.3 billion (US$98.9 billion).

SECTION 7 NIPPON TELEGRAPH AND TELEPHONE PATENTS

Issued October 17, 2017

Highly reliable path accommodation design apparatus and method [9,794,123]

Accommodation design for wavelength and sub-.lamda. paths in a communication network is performed. If sub-.lamda. path accommodation is possible according to search for a wavelength path present in a single-hop logical route, the accommodation in the wavelength path is executed. If sub-.lamda. path accommodation is possible according to search for a wavelength path present in a multi-hop logical route, a logical route is selected based on the wavelength path and the sub-.lamda. path is accommodated in the wavelength path. Additionally, each physical route suitable for the sub-.lamda. path accommodation is searched for. If the route can accommodate a wavelength path set in a single-hop logical route by available wavelength allocation, the sub-.lamda. path is accommodated in the wavelength path. Furthermore, routes in consideration of overlapping of nodes, pipelines, and links and operation rate are selected based on information about the start and end nodes of each of redundant routes.

User experienced quality estimation apparatus, terminal bottleneck determination apparatus, similar operation extraction apparatus, method and program [9,794,149]

A user experienced quality estimation apparatus estimating a user experienced waiting time of an application in an user terminal, includes: a computer configured to: obtain, as estimation target logs, a duration time of each process of data obtaining, script execution and screen rendering performed in an estimation target period in the user terminal, and to store the estimation target logs in a received log storage unit; read out the estimation target logs from the received log storage unit, and output logs, excluding logs having data duration time shorter than a predetermined short time process threshold or longer than a predetermined long time process threshold; calculate, as multiplicity, the number of processes in a timeslot of a constant time length for the output logs; and extract a continuous region from data quantized by the quantization unit.

Proxy computing system, computing apparatus, capability providing apparatus, proxy computing method, capability providing method, program, and recording medium [9,794,060]

A computing apparatus outputs.tau.sub.1 and.tau.sub.2 corresponding to a ciphertext x, a capability providing apparatus uses.tau.sub.1 to correctly compute f(.tau.sub.1) with a probability greater than a certain probability and sets the result of the computation as z.sub.1, uses.tau.sub.2 to correctly compute f(.tau.sub.2) with a probability greater than a certain probability and sets the result of the computation as z.sub.2, the computing apparatus generates a computation result u=f(x).sup.bx.sub.1 from z.sub.1, generates a computation result v=f(x).sup.ax.sub.2 from z.sub.2, and outputs u.sup.b'v.sup.a' if the computation results u and v satisfy a particular relation, where G and H are groups, f(x) is a function for obtaining an element of the group G for x.epsilon.H, X.sub.1 and X.sub.2 are random variables having values in the group G, x.sub.1 is a realization of the random variable X.sub.1, and x.sub.2 is a realization of the random variable X.sub.2.

To view more details on these Patents, click here

SECTION 8 STOCK BUZZ

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August 04: Nippon Telegraph and Telephone: Announcement of Financial Results for the Three Months Ended June 30, 2017

August 04: Nippon Telegraph and Telephone: Announcement of Financial Results for the Three Months Ended June 30, 2017 (Subsidiaries Information)

The financial results of Nippon Telegraph and Telephone East Corporation (NTT East) for the three months ended June 30, 2017 are presented in the following attachments.

(Attachments)

1. Non-Consolidated Comparative Balance Sheets

2. Non-Consolidated Comparative Statements of Income

3. Business Results (Non-Consolidated Operating Revenues)

August 04: Nippon Telegraph and Telephone: Announcement of Financial Results for the Three Months Ended June 30, 2017 (Supplementary Data)

August 04: Nippon Telegraph and Telephone: Announcement of Financial Results for the Three Months Ended June 30, 2017 (Presentation Material)

June 28: Nippon Telegraph and Telephone: Corporate Governance Report

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

Contact: 81 35 20 55 58 1

Physical Address: 2-3-1 Ohtemachi Chiyoda-ku Tokyo, 100-0004 Japan

State/Province/Country: TKY, Japan

Country of Incorporation: Japan

Exchange: Tokyo Stock Exchange

ISIN: JP3735400008

TO:9432; TYO:9432; T:9432; JP:9432; 9432.T

Nippon Telegraph & Telephone Corp, Nippon Telegraph And Telephone Corp

Source: www.BuySellSignals.com