Japanese stock alert

JAP

CLOSING UPDATE: KAO down 3.9% in 2 days 25 July 2017 16:31 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).

KAO, the 2nd largest chemicals company by market capitalisation in the Japan's, extended its slide on Tuesday, shedding an additional JPY73.0 (or 1.1%) to trade at JPY6,851.0. Trading volume was 73% of average at the end of the day. The shares have fallen JPY281.0 (or 3.9%) over the past two trading days vs. the Nikkei 225 Index which has fallen 0.7% in the same period.

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

Overvaluation:

+ Price/Earnings of 27.1 [19.0]

+ Price/Earnings/Growth of 1.04 [0.8]

+ Price/Sales of 2.4 [1.2]

+ Price to Book of 6.5 [2.1]

+ Dividend yield of 1.5% [1.7%]

Bearish Signals:

+ Tobin's Q Ratio is 2.6. Compared with the rest of the market the stock is overvalued and ranks in the bottom quartile of stocks by value of Q Ratio.

Note

The stock has outperformed 77% of the Japan market over the past 6 months.

Bullish Signals:

The positive 54.63 MACD (Moving Average Convergence Divergence) indicator suggests a bullish signal.

The 4.4% discount to 12-month high of JPY7,164.0 against the 42.5% premium to 12-month low of JPY4,808.31 suggests the stock continues to push for new highs.

In the last three months the stock has hit a new 52-week high eighteen times, pointing to a significant uptrend.

The price increased 0.8% in the last week and 0.7% in the last month.

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

Net profit margin has averaged 7.1% in the last 3 years. This is better than the sector average of 5.3% and suggests a high margin of safety.

As per the Du Pont analysis, Return on Equity of 18.6% is better than sector average of 9.4%.

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

Undervaluation:

Return on Equity 18.6% [9.4%]

Return on Assets 9.6% [4.9%]

Return on Capital Employed 20.2% [9.8%]

Year-on-Year Earnings Growth of 28.4% [22.6%]

TODAY'S ALERTS

Afternoon Alert: KAO down 3.7% in 2 days

25 July 2017 13:12 JST

KAO Corporation (TO:4452) extended its slide on Tuesday, shedding an additional JPY59.0 (or 0.9%) to trade at JPY6,865.0. Trading volume was 60% of average so far today. The shares have fallen JPY267.0 (or 3.7%) over the past two trading days vs. the Nikkei 225 Index which has fallen 0.7% in the same period.

Morning Alert: KAO down 3.4% in 2 days

25 July 2017 10:56 JST

KAO Corporation (TO:4452) extended its slide on Tuesday, shedding an additional JPY35.0 (or 0.5%) to trade at JPY6,889.0. Trading volume was 51% of average so far today. The shares have fallen JPY243.0 (or 3.4%) over the past two trading days vs. the Nikkei 225 Index which has fallen 0.5% in the same period.

RECENT ALERTS

CLOSING UPDATE: KAO dropped 2.9%, led Chemicals sector lower

24 July 2017 16:28 JST

KAO, the 2nd largest chemicals company by market capitalisation in the Japan's, has dropped 2.9% to trade at JPY6,924.0 vs. the Chemicals sector which weakened 106.3 points (or 0.4%) to 26,470.2. Representing a weighting of about 8.1% of the sector, the stock accounted for 59.4% of today's loss. Compared with the Nikkei 225 Index which fell 172.5 points (or 0.9%) in the day, this represented a relative price change of -2.1%.

Morning Alert: KAO drops 2.7% on firm volume

24 July 2017 10:54 JST

KAO Corporation (TO:4452) traded on heavy volume of 1.1 times average so far today while the price dropped JPY194.0 (or 2.7%) to trade at JPY6,938.0.

KAO Corporation (TO:4452; TYO:4452; T:4452; JP:4452)

ISIN: JP3205800000

Source: www.BuySellSignals.com