Japanese stock alert

JAP

CLOSING UPDATE: Denso increases further 0.5% - outperforming 83% of stocks 16 January 2018 16:26 JST

NEWS BITES - JAPAN

This is an end of day Alert, produced after today's Japan market close. It concludes the BSS News Bites intra-day Alert series (summaries below).

Denso, the 3rd largest transportation equipment company by market capitalisation in the Japan's, has lifted JPY149.0 (or 2.1%) today to trade at JPY7,176.0 and has outperformed 83% of the market in the past month. A price rise combined with a high relative strength is a bullish signal. Compared with the Nikkei 225 Index which rose 236.9 points (or 1%) in the day, this represented a relative price increase of 1.1%.

Technical indicators complementing today's significant uptrend:

+ The positive 199.27 MACD (Moving Average Convergence Divergence) indicator suggests a bullish signal.

+ In the last one month the stock has hit a new 52-week high seven times and in the last three months seventeen times, pointing to a significant uptrend.

+ The price lifted 2.4% in the last week and soared 10.8% in the last month.

+ The present value of JPY1,000 invested one year ago is JPY1,501 [vs JPY1,254 for the Nikkei 225 Index].

Fundamental measures by comparison with the sector average [in brackets] indicate:

Undervaluation:

+ Return on Assets 5.3% [3.9%]

+ Return on Capital Employed 9.2% [7.9%]

Other Bullish Signals include:

+ Interest cover is less leveraged at 37.5 times.

+ Total Liabilities/EBITDA of 4.6 is less than the Joseph Piotroski benchmark of <5.

+ Tobin's Q Ratio is 1.1. Compared with the rest of the market the stock is undervalued.

+ Net profit margin has averaged 6.1% in the last 3 years. This is better than the sector average of 5.5% and suggests a high margin of safety.

Note

Bearish Signals:

As per the Du Pont analysis, Return on Equity of 8.8% is lower than sector average of 9.8%.

Overbought/Bearish:

The 0.1% discount to 12-month high of JPY7,182.0 against the 59.4% premium to 12-month low of JPY4,502.76 suggests the climb might be peaking.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Overvaluation:

Price/Earnings of 17.7 [13.5]

Price/Sales of 1.2 [0.7]

Price to Book of 1.7 [1.4]

Dividend yield of 1.7% [2.3%]

Return on Equity 8.8% [9.8%]

TODAY'S ALERT

Afternoon Alert: Denso increases 1.6% - outperforming 82% of stocks

16 January 2018 13:02 JST

Denso Corporation (TO:6902) has increased JPY112.0 (or 1.6%) today to trade at JPY7,139.0 and has outperformed 82% of the market in the past month. A price rise combined with a high relative strength is a bullish signal.

Denso Corporation (TO:6902; TYO:6902; T:6902; JP:6902)

ISIN: JP3551500006

Source: www.BuySellSignals.com