What Worked Japan - 25 Nov 2016 - Value looking strong, 12M momentum weaker

What Worked – Japan Value continues to perform this week making it three from three weeks with strongly positive returns. The last run with similar ICs was back in April/May 2015, and unfortunately did not end pretty for value in the following couple of months. Inexpensive names on a forward PER basis that did well this week included Haseko Corp (1808, +5.2%), Itochu (8001, +3.1%) and Marubeni (8002, +3.1%), with Itochu and Marubeni also being boosted by a weakening JPY.  More expensive names taking a hit this week included Eisai (4523, -5.5%), Nippon Paint (4612, -2.3%) and Recruit Holdings (6098, -1.2%).

12 Month momentum also took a hit this week, likely being pushed lower by the continued swing into Value. DeNA (2432, -2.8%), Lion Corp (4912, -1.9%) and ITO EN (2593, -2.0%) amongst the best performers over the last year that did not fare well this week. At the same time, some of the year’s biggest losers saw a bounce this week, including Mitsubishi Motors (7211, +5.6%), Casio Computer (6952, +10.8%) and Sanrio (8136, +6.1%).

Who Moved – Not a lot moving on volume this week with only 8 names from TOPIX 500 managing to move on significantly higher than normal volumes. On the positive side, Pola Orbis Holdings (4927, +6.3%), Chiyoda Corp (6366, +2.7%) and Medipal Holdings (7459, +1.5%) moved higher on strong volume, while Nabtesco (6268, -4.0%), Konami Holdings (9766, -1.7%) and OBIC (4684, -1.2%) amongst those finishing the week lower.

Summary

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