Japanese Stocks: A Perfect Stock-Picker's Market
Shares of such leading Japanese companies as Sony Corp (NYSE: SNE), Toyota Motor Corp (NYSE: TM) and Nippon Telegraph & Telephone Corp (NYSE: NTT) are sporting varying potential from a technical perspective.
Sony's Fundamentals
• A 1.2 percent dividend yield
• A price-to-book ratio of 1.22
• A price-to-sales ratio of 0.35
• An enterprise value of $28.18 billion versus a market capitalization of $24 billion
• A debt-to-equity ratio of "only" 34.98 percent
• A not-so-attractive current ratio of 0.90
• Negative sales growth estimates and negative EPS estimates for 2015
Technical Take
Technically, Sony shares appear to have broken out above the very long-term downtrend line and even appear to have successfully tested the broken downtrend line as new support.
Related Link: The Technical Take On Twitter
Now, technicians believe the stock could continue to rally up toward $27.84 -- the 100 percent Fibonacci price projection line, also known as “correction resistance." Ideally, they note, buys can be made on a pullback to the recent broken peak at $20.19.
Toyota's Fundamentals
• A seemingly cheap PE of 11
• A price-to-book ratio of 1.47
• A price-to-sales ratio of 0.87
• An enterprise value of $303 billion, which trumps a market capitalization of $193.24 billion
• Gross margins of 9.15 percent, which spin off $28 billion in positive operating cash flows annually
• A current ratio of 1.06
• A debt to equity ratio of 108.67 percent
Technical Take
Technicians note that Toyota shares appear to be in the midst of a short-term corrective move higher (wave “(c) & b”) that should have a ceiling set at no higher than $127.37.
Once that level is approached or tested, the technicians believe that a wave “c” move lower may take shares all the way down for a test of the $98 to $100 support range.
Nippon's Fundamentals
• Near 5.1 percent net profit margins that spin off over $4.26 billion in positive levered free cash flow annually
• Clean balance sheet metrics, including a debt-to-equity ratio of 38.11 percent and a current ratio of 1.48
• A price-to-sales ratio of 0.65
• A price-to-book ratio of 0.83
• An enterprise value of $87.8 billion, which trumps a market capitalization of $59.9 billion
• A PE of just over 10
Technical Take
Technicians note Nippon stock may be in the final stages of a long-term “abc” downside correction, which shows up clearly on the weekly chart.
The downside target for Nippon if the current pattern is an “abc” correction (and not something more serious on the downside) is $25.74. Additional support comes into play at the horizontal line at $25.23.
See more from Benzinga
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
