< The 2014 All-Japan Research Team
| Atsushi Yamaguchi |
| UBS |
First-Place Appearances: 12 Total Appearances: 16 Analyst Debut: 1999 |
UBS’s Atsushi Yamaguchi, who was inducted into the All-Japan Research Team Hall of Fame last year, extends his winning streak to an even dozen years. The 48-year-old analyst “has probably been covering the sector longer than anyone, and he has great perspective,” one admirer offers. “No one does a better job of projecting price movements and [calculating] whether upside and downside risks and catalysts are priced into the stock.” Yamaguchi is touting Tokyo-based Nippon Steel & Sumitomo Metal Corp., whose shares closed at ¥276 in mid-March, down 21.6 percent year to date and trailing the sector by 2.7 percentage points. Even so, the analyst contends that, following the 2012 merger of heavyweights Nippon Steel Corp. and Sumitomo Metal Industries, the emerging powerhouse is poised to “establish itself as the strongest competitor in Asia over the next three years.” He forecasts that increased production at auto-sheet plants outside Japan will boost earnings and that cost savings will be “driven by amalgamating production facilities.” More broadly, Yamaguchi notes, “if the yen remains weak, the company could see [retained profits] recover to 50 to 60 percent of peak levels, even if market prices slacken.” His price objective for Nippon Steel’s shares is consequently aggressive, at ¥400. Another current top pick is Hitachi Metals, a metals and materials provider based in Tokyo. Since the recession, he says, “specialty steel products have recovered some of their competitiveness in Asia as the yen has started to weaken, while amorphous alloys are firm.” Moreover, a restructuring that included Hitachi Metals’ July 2013 acquisition of Hitachi Cable has helped stabilize earnings, he advises. Over the long term, Yamaguchi expects the company to enjoy “higher sales of continuously variable transmission-belt and aircraft materials.” The stock changed hands at ¥1,466 in mid-March, and he projects a rise to ¥1,730.
