• What's the Average 401(k) Balance by Age?

    What's the Average 401(k) Balance by Age?

    How much money people have put away for retirement varies, naturally, by their age group. See how your savings stack up.

  • 3 “Strong Buy” Penny Stocks That Could Go Boom

    3 “Strong Buy” Penny Stocks That Could Go Boom

    Penny stocks are controversial, to say the least. When it comes to these under $5 per share investment opportunities, Wall Street observers usually either love them or hate them. The penny stock-averse point out that while the bargain price tag is tempting, there could be a reason shares are trading at such low levels like poor fundamentals or insurmountable headwinds.However, the other side of the coin has merit as well. Naturally, with these cheap tickers, you get more bang for your buck in terms of the amount of shares. On top of this, other more expensive and well-known names aren’t as likely to produce the colossal gains that penny stocks are capable of.Given the nature of these investments, Wall Street analysts recommend doing some due diligence before pulling the trigger, noting that not all penny stocks are bound for greatness.With this in mind, we set out our own search for compelling investments that are set to boom. Using TipRanks’ database, we pulled three penny stocks that have amassed enough analyst support to earn a “Strong Buy” consensus rating. Adding to the good news, each pick boasts over 125% upside potential. Hyrecar, Inc. (HYRE)We all know about the gig economy, which turned the world of freelance work upside down by using the internet to connect people with skills to jobs that needed doing. And we all know how Airbnb used a similar model in the world of short-term lodging. Hyrecar brings the online sharing model to the automotive sector, allowing vehicle owners to rent out their cars short-term, even hourly; car owners can use their cars to make money during downtime, while car renters get the convenience of a vehicle right when they need it.Where many companies saw steep revenue drops in Q1, Hyrecar’s top line was healthy. Revenues grew 20% sequentially and 65% year-over-year, to reach $5.8 million. While EPS was negative, showing a 25 cent per share net loss, that was a 19% improvement from Q4’s 31-cent net loss. The solid revenue number and the EPS improvement were based on a 16% increase in rental days from Q4 to Q1.At $2.25, several analysts argue that now is the time to snap up shares. Ladenburg analyst Jon Hickman puts Hyrecar into the context of recent events, and likes the fit he sees: “Prior to early March, the company hit a weekly rental day high of more than 20,000 as vehicle supply continued to climb in line with the success of the Fleet initiative. In the days that followed (as the country shut down) through early April, weekly rental days fell to a level of 14,000, but have since begun to recover as the company focused its drivers on delivery opportunities… the company's concerted effort to help drivers sign up with such services as Door Dash, Instacart, and other delivery services (food and packages) has resulted in a notable uptick in weekly rental days, which is now trending toward 18,000.”Believing that HYRE’s best days are in front, and that the company will see continued growth into 2021, Hickman puts a Buy rating on the stock. His $5.25 price target suggests a one-year upside potential of 133%. (To watch Hickman’s track record, click here)Overall, Wall Street agrees that HYRE is a stock to buy. The Strong Buy analyst consensus is unanimous, based on 4 recent positive reviews, while the average price target, of $5.94, is actually more bullish than Hickman’s, implying a 171% upside potential in the coming year. (See Hyrecar stock analysis on TipRanks)Genco Shipping, Inc. (GNK)Next up is a small-cap shipping company, Genco. The company boasts a market cap of $207 million, along with a major asset: a modern fleet of dry bulk carriers. These ships, varying in size from 34,000-ton Handysize freighters to the giant 175,000+ ton Capemax vessels, are wholly owned and modern, with a majority of the fleet build in the past decade. Genco transports essential dry bulk cargoes such as coal, grain, iron ore, and steel around the world.The coronavirus pandemic, with its heavy impact on trade and travel, hit Genco hard in Q1. The company saw earnings plummet, and EPS registered a 17-cent loss per share in the first quarter, a sharp turn from Q4’s 7-cent profit. At the same time, the company was able to continue streamlining its operations, including selling off three of its least profitable vessels, and took action to improve its cash position. Genco finished the quarter with $134.3 million in unrestricted cash on hand, and is negotiating a further $25 million in collateralized credit from its main lenders.Despite the recent struggles, one analyst argues that the $4.94 price tag is a solid deal for investors.Writing on GNK stock for Evercore ISI, Jonathan Chappell said, “GNK still retains the strongest balance sheet in the dry bulk industry… GNK should be able to build upon its cash balance, enabling it to return to the prior dividend run rate once there is more clarity on the global economic backdrop and the timing on an eventual dry bulk market recovery, while its liquidity could also render it as the market consolidator if other less-well-capitalized owners fall victim to a prolonged global recession.”Chappell's numbers are upbeat, too. The $9 price target suggests a robust 82% upside potential, and fully supports his Buy rating on the stock. (To watch Chappell’s track record, click here)Chappell's bullish stance on Genco Shipping is in line with Wall Street’s view. GNK has a Strong Buy consensus rating, based on 4 Buy ratings and single Hold set in recent weeks. Meanwhile, the average price target of $10.80 leaves a room for nearly 119% upside from current levels. (See Genco stock analysis on TipRanks)Reed’s, Inc. (REED)Reed’s, a small cap company in the craft soda markets, is best known for its ginger ale and ginger beer products. The company’s eponymous brand and product line also extends to zero-sugar sodas and ginger candy. It’s a small niche, but one with a clear path forward: Reed’s reported a 13% year-over-year sales increase in Q1 2020. That sales increase translated into a $9.5 million top line. While EPS has been showing let losses for the past two years, those losses bottomed in Q3 2019; the Q1 number, a loss of 5 cents per share, represented the smallest loss in 9 quarters, and a 44% sequential improvement. Looking forward, the quarterly loss is expected to narrow further, to just 3 cents per share, in Q2. The positive outlook is buoyed by the 21% volume growth of the core Reed’s Ginger Ale brand in Q1.At only $0.68 per share, some members of the Street see an attractive entry point.Maxim analyst Anthony Vendetti writes of REED, “…the COVID-19 pandemic has resulted in some slight reset delays, it has also generated robust supermarket trends, creating increased demand for REED products in grocery stores. The company continues to expand its distribution network and has increased its manufacturing capacity… REED continues to enhance its supply chain, only experiencing minimal disruptions due to COVID-19.”Overall, based on "REED’s differentiated product offerings and continued progress," Vendetti stays with the bulls. That solid position underlies Vendetti’s Buy rating, while his $2 price target implies a whopping 194% upside potential for the year ahead. (To watch Vendetti’s track record, click here)Like the other stocks in this article, REED has a Strong Buy consensus – and it is based on 3 Buy ratings given in the past 3 months. The shares have an average price target of $2.33, suggesting a 243% upside from current levels. (See Genco stock analysis on TipRanks)To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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  • Las Vegas Casinos Reopen This Week, And Here's What Investors Should Expect

    Las Vegas Casinos Reopen This Week, And Here's What Investors Should Expect

    After more than two months of being completely shut down, casinos on the Las Vegas strip will reopen this week for the first time as part of the city's "Phase 2" plan to safely return to normal. While reopenings will be a big step in the right direction for casino stock investors, Vegas will still have a steep hill to climb in the near term.What Happened? On June 4, MGM Resorts International (NYSE: MGM) plans to reopen the Bellagio, MGM Grand and New York-New York casinos, which represent a combined 39% of the company's total Las Vegas rooms. Caesars Entertainment Corporation (NASDAQ: CZR) also plans to reopen Caesars Palace and the Flamingo, which account for 32% of its total Vegas rooms.Wynn Resorts, Limited (NASDAQ: WYNN) also plans to open both its Wynn and Encore casinos. Las Vegas Sands Corp. (NYSE: LVS) is reopening the Venetian and the Palazzo.Why It's Important: The good news for casino stock investors is that other regional casinos that have already reopened have witnessed significant pent-up demand. For example, Mississippi Gulf Coast casinos reopened at half capacity for Memorial Day weekend and reported a 17.3% increase in gross gaming revenue for the weekend compared to last year. Bank of America analyst Shaun Kelley said Tuesday casinos in other regions of the country have demonstrated similar trends."Casino openings so far have shown signs of pent-up demand, a trend which we expect to persist in the near-term possibly making our down ~95% GGR estimates for Q2 too conservative," Kelley wrote in a note.See Also: Analyst: Why Penn National And Boyd Could Outperform As US Casinos Reopen What's Next? Unfortunately, Kelley said Vegas may be one of the slowest areas to recover due to its reliance on air travel, cancellations of events and conventions and relatively low pricing power. Kelley estimates air traffic makes up roughly 60% of Vegas' total visitors, and the latest air traffic data suggests travel remains down about 90% from a year ago.For investors looking to bet on a Vegas recovery, Bank of America has the following ratings and price targets for the four casino stocks mentioned: * Las Vegas Sands, Buy rating and $61 target. * Wynn Resorts, Buy rating and $95 target. * MGM Resorts, Underperform rating and $15 target. * Caesars, no rating.Benzinga's TakeFor the next several months, most investors will be looking past abysmal near-term numbers and hoping that their stocks catch a bid based on expectations that the economy will eventually return to normal.Las Vegas casino stocks will likely be closely tied to a recovery in air travel, and Bank of America estimates 2021 US airline revenue will be down just 18% from 2019 levels.Do you agree with this take? Email feedback@benzinga.com with your thoughts.Latest Ratings for MGM DateFirmActionFromTo May 2020UBSMaintainsNeutral May 2020Credit SuisseAssumesNeutral May 2020B of A SecuritiesDowngradesNeutralUnderperform View More Analyst Ratings for MGM View the Latest Analyst RatingsSee more from Benzinga * 7 Sin Stocks To Buy During The Coronavirus Shutdown * Q1 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios * The Road To Recovery For Las Vegas Casino Stocks(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Here are the 10 most under and overbought S&P 500 stocks, according to Goldman

    Here are the 10 most under and overbought S&P 500 stocks, according to Goldman

    There has been significant divergence between individual stock prices and their expected earnings next year, presenting some buying and selling opportunities for investors

  • Exclusive: Huawei hid business operation in Iran after Reuters reported links to CFO

    Exclusive: Huawei hid business operation in Iran after Reuters reported links to CFO

    China's Huawei Technologies acted to cover up its relationship with a firm that had tried to sell prohibited U.S. computer gear to Iran, after Reuters in 2013 reported deep links between the firm and the telecom-equipment giant's chief financial officer, newly obtained internal Huawei documents show. Huawei has long described the firm - Skycom Tech Co Ltd - as a separate local business partner in Iran. Now, documents obtained by Reuters show how the Chinese tech titan effectively controlled Skycom.

  • Barrons.com

    What Happened in 1968 Can Show Us Why the Market Is Rising Now

    In 1968, the U.S. economy was in the midst of one of the most robust expansions in history, spurred by the “guns and butter” fiscal policies of Great Society programs and Vietnam War spending.

  • Is The Ultimate Warren Buffett Stock A Buy Amid The Coronavirus Rally?
    Investor's Business Daily

    Is The Ultimate Warren Buffett Stock A Buy Amid The Coronavirus Rally?

    Berkshire Hathaway is the ultimate Warren Buffett stock. But is it a good buy? Here's what the earnings and chart show for Berkshire stock.

  • Electric truck maker Nikola looks like Tesla 2.0 — except even riskier
    LA Times

    Electric truck maker Nikola looks like Tesla 2.0 — except even riskier

    The billionaire founders of Nikola and Tesla have a lot in common

  • The real reason Social Security is in crisis

    The real reason Social Security is in crisis

    Another day, another warning that Social Security is running out of money. University of Pennsylvania’s Wharton School of Business warns that the costs of the coronavirus pandemic, and the economic shock from the lockdown, may cause the Social Security trust fund to run out of money in as little as 12 years from today. This comes soon after even the Social Security Administration admitted, in a set of calculations made before the crisis, was warning that zero hour for the fund was looming in 2035.

  • Planning to retire in your 60s? Here’s a roadmap

    Planning to retire in your 60s? Here’s a roadmap

    Saving for retirement is a lifelong process. First and foremost, successfully financing your retirement requires a detailed budget that evolves as your income and expenses grow. When entering the workforce after graduating college, many of us are introduced to health care and retirement benefits for the first time.

  • These 4 Biotech Stocks Are Outperforming Their Peers — Here's Why
    Investor's Business Daily

    These 4 Biotech Stocks Are Outperforming Their Peers — Here's Why

    The best biotech companies to invest in tend to have a commonality: a strong streak of earnings growth.

  • Gun stocks rally as continued surge in background checks, street violence stoke demand

    Gun stocks rally as continued surge in background checks, street violence stoke demand

    Shares of gun and ammo makers surged again Tuesday, as data showing a continued surge in firearm background checks and reports of another night of street violence helped fuel investor demand.

  • MarketWatch

    Genius Brands stock soars, after regaining Nasdaq compliance, stock offerings and spike in short interest

    Shares of Genius Brands International Inc. soared 53.4% on very heavy volume in afternoon trading Tuesday to the highest close since September 2017. Volume shot up to 166.4 million shares, well above the full-day average of 31.2 million, and enough to make the stock the most actively traded on major U.S. exchanges. The stock has rocketed about 13-fold (up 1,187.6%) in the past month, while the S&P 500 has gained 8.8%. The company is a kids media company, with shows including "Stan Lee's Superhero Kindergarten," "Rainbow Rangers" and "Llama Llama." The company has not immediately responded to a request for comment. After Friday's close, the company disclosed that it regained compliance with the Nasdaq's minimum bid price listing standard, and on Thursday the company disclosed a registered direct offering of 20 million shares of common stock to the public at a price of $1.50 to raise $30 million. That came less than two weeks after the company announced a registered direct offering of 7.5 million shares at $1.20 a share to raise $9 million. Separately, the latest data from Nasdaq showed that short interest, or bearish bets on Genius Brands' stock, jumped to a record of about 3.07 million shares according to FactSet, representing 7.5% of the public float.

  • This unusual income fund has a dividend yield of 6.5% and has beaten the S&P 500

    This unusual income fund has a dividend yield of 6.5% and has beaten the S&P 500

    John Bartlett at the Reaves Utility Income fund selects companies with high returns on equity from expansion or improvement projects.

  • The stock market isn’t reflecting reality yet, but Citigroup warns that pain and ‘collateral damage’ are on the way

    The stock market isn’t reflecting reality yet, but Citigroup warns that pain and ‘collateral damage’ are on the way

    Manolo Falco, Citigroup’s co-head of investment banking explained to the Financial Times why he believes the firm’s corporate clients should raise as much cash as possible before the reality of the pandemic sinks in for investors

  • Here’s why the ‘unloved but welcome’ U.S. stock market rally from March lows won’t last, Goldman says

    Here’s why the ‘unloved but welcome’ U.S. stock market rally from March lows won’t last, Goldman says

    The “unloved but welcome” stock market rally over the past two months is unlikely to persist, according to Goldman Sachs analysts. After opening lower on Monday amid civil unrest and U.S.-China trade tensions the Dow Jones Industrial Average (DJIA)  reversed losses as investors focused on hopes of an economic recovery, closing 91.91 points higher. Optimism over the economic recovery from coronavirus, with all 50 states taking steps to reopen, has sent stocks higher in recent weeks.

  • Natural Gas May Be the Next Commodity to Trade Below Zero

    Natural Gas May Be the Next Commodity to Trade Below Zero

    (Bloomberg) -- The specter of negative prices is hanging over energy markets more than a month after oil’s unforgettable crash below zero.While crude has staged a rapid recovery after a deal by the biggest producers to curb a surplus, the $600 billion global gas market remains extraordinarily oversupplied. Traders and analysts say the worst may be yet to come as demand falls and storage nears capacity, creating the ideal conditions for negative prices in some parts of the world.It shows just how far the global energy industry is from recovering from a pandemic-fueled slide in demand and signals more pain for producers from the shale fields of Texas to Australia’s Curtis Island. Unlike the oil market, there’s been no sign of a coordinated response to address the glut, meaning the fallout could be deeper and longer.“We are in uncharted territory with low demand levels and high storage stocks,” said Guy Smith, head of gas trading at Swedish utility Vattenfall AB. “In the shorter term there is real risk that conditions may be set to allow negative prices in Europe, but only in the very short term.”The fuel, used to generate power and heat and as a feedstock for chemicals and fertilizers, was already slated to have a terrible year after a mild winter exacerbated a glut. But things turned from bad to worse as the pandemic hammered demand, forcing major buyers to reject deliveries. Meanwhile, top sellers haven’t yet throttled back enough output as stockpiles near capacity.Like oil’s brief plunge in April below minus-$40 a barrel, the key factor is the lack of storage to absorb excess supply. Traders and analysts point to Europe as the first market likely to hit that crisis point, which could have ripple effects for buyers and sellers from the U.S. to Asia.While the oil market has a broad, if fragile, alliance of producers to manage production and rescue prices, led by Saudi Arabia and Russia, the gas market lacks a coordinated approach, allowing the current oversupply to drift unchecked.With a deep bench of buyers across utilities and trading houses and flexible infrastructure that can both import and export cargoes, Europe has in recent years become known as the “sink” for global gas -- balancing booming output from the U.S. with the increasingly energy-hungry economies of Asia, led by China.That roll may soon be challenged as inventories across Europe are at a seasonal record of 73% capacity, compared with the 5-year average of 45%, according to data compiled by Gas Infrastructure Europe.“European gas storage inventory is the biggest risk for global gas markets,” said Edmund Siau, a Singapore-based analyst at energy consultant FGE, who expects the region’s storage to hit capacity in August. “Gas prices will see increasing downward pressure and volatility as the market gradually loses one of the tools to balance itself.”One European market in particular has come in focus as the most likely to go negative. While the world’s four major indexes have converged near historic lows, the U.K.’s National Balancing Point is the weakest, with the next-day contract recently dropping to the equivalent of about $0.99 per million British thermal units.“If we see below-zero gas prices in Europe, we will see it in the U.K.,” said Hadrien Collineau, senior gas analyst at Wood Mackenzie Ltd. “The market is constrained by its physical capacity, and once storage sites are filled, prices can go below zero. The U.K. doesn’t have much place for more gas, while we still have space in continental Europe.”The U.K.’s storage capacity declined drastically after Centrica Plc’s Rough facility closed in 2017.European prices would be more likely to flip negative in the prompt contracts -- such as within-day or day-ahead rather than contracts further out -- when storage injection rates are low and demand is weak due to mild, windy weather, according to Nick Boyes, an LNG and gas analyst at Swiss utility and trader Axpo Group.“I think the highest possibility of this happening is in August or early September when we have a greatest coincidence of both lowest demand and highest storage inventories,” he said.Natural gas is no stranger to negative prices. The U.K.’s NBP plunged below zero in 2006 after a pipeline opened for commercial imports from Norway. That plunge was more of an operational issue from the pipeline than a market trend, and it wasn’t in the middle of a bearish market, such as the one today, according to James Huckstepp, manager of EMEA gas analytics at S&P Global Platts.In the U.S., associated gas, a byproduct of shale drilling, has periodically gone negative due mainly to increased production coming up against limited transport capacity at places such as the Waha Hub in West Texas.While some estimates have Europe’s storage facilities hitting capacity as soon as next month, analysts at Morgan Stanley and Platts see it getting close but just missing it. Still, sub-zero prices are a possibility even if hitting “tank tops” is avoided.“It may require a short period of negative prices to make suppliers understand the gravity of this situation -- and this is before storages are completely full,” said Jonathan Stern, senior research fellow at the Oxford Institute of Energy Studies.While traders and analysts surveyed by Bloomberg last month noted that there’s a possibility sub-zero gas could emerge in Europe, most said the chances are slim as suppliers would likely quickly respond before it gets to that point.Indeed, there are some signs that supply is easing.Buyers of U.S. liquefied natural gas have canceled dozens of cargoes scheduled for the summer. Meanwhile, shipments from nations including Malaysia, Brunei and Norway dropped last month, when global LNG export growth halted years of expansion.But overall, according to FGE’s Siau, there hasn’t been a large enough output curb to balance the market and stop a further price slide. Flows from top exporter Russia through its Yamal-Europe pipeline, for instance, fluctuated at the end of May but have increased again this month.Qatar’s energy minister said last month that there would be something “drastically wrong” with the market if the country stopped selling LNG because of low prices. Meanwhile, LNG consumption this summer is forecast to drop 2.7%, the first seasonal demand contraction since 2012, Robert Sims, a research director at Woodmac, said in a note.“I expect lower for longer -- but we might get stuck into this bad equilibrium, too low to make real money as a supplier but not low enough to unlock a huge tranche of demand,” Nikos Tsafos, senior fellow at the Center for Strategic and International Studies, said by email. “What’s the floor? Frankly we have no idea. We haven’t seen prices like these ever before.”(Updates with Qatar’s comment in second to last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    US yield curve steepens as 30-year Treasury falls from favour

    Long-dated Treasury bonds have lost favour among investors, sending yields to their highest since March, following a jump in borrowing to fund a massive economic stimulus and signs of shifting policy by the Federal Reserve. The increase in rates on 30-year debt in recent days has been sharper than on shorter-term Treasuries, to such an extent that one part of the US yield curve is now steeper than at almost any point in the past three years. Traders said the move reflects a combination of factors, including a stabilising economic outlook and the expectation that while the Fed will continue to hold short-term Treasury yields low, it will be less aggressive in its interventions in the market for long-dated government debt.

  • Here's When I'd Adjust My Position Size in Microsoft

    Here's When I'd Adjust My Position Size in Microsoft

    Why am I even in Microsoft to begin with? Before there was a pandemic to deal with, and now a social crisis that will keep many downtowns shuttered for longer than they should have been, Microsoft was effectively growing the business through the firm's mutli-cloud environments for business. Azure (+59%) has been aggressively gaining market share on industry leader Amazon AWS.

  • Stock Picks: Lessons From Veeva, Nvidia, Netflix On How To Find The Best Stocks To Buy
    Investor's Business Daily

    Stock Picks: Lessons From Veeva, Nvidia, Netflix On How To Find The Best Stocks To Buy

    Looking for the best stocks to buy and watch? Follow a simple three-step routine and buy rules to make sure you zero in on the best potential stock picks.

  • Ericsson shares boosted after 5G contract win in Canada, beating Huawei

    Ericsson shares boosted after 5G contract win in Canada, beating Huawei

    Bell Canada, part of BCE Corp, had relied on Huawei for deploying 4G infrastructure but went with Ericsson as Canada was deliberating whether to allow Huawei to sell 5G equipment in the country. The United States has raised security concerns about Huawei and has warned that allies that use its equipment in their networks risked being cut off from valuable intelligence sharing.

  • China may sell Treasurys, but that doesn’t mean it’s ‘weaponizing’ its more than $1 trillion hoard of U.S. debt, says Deutsche Bank

    China may sell Treasurys, but that doesn’t mean it’s ‘weaponizing’ its more than $1 trillion hoard of U.S. debt, says Deutsche Bank

    Deutsche Bank analysts say any sale of U.S. Treasurys by Beijing is likely unrelated to efforts by China to retaliate against the U.S., as tensions between the two superpowers flare.

  • A $100 Billion Robotics Supplier Is Japan’s Second Biggest Firm

    A $100 Billion Robotics Supplier Is Japan’s Second Biggest Firm

    (Bloomberg) -- It’s the rise of the robots: Japan’s second-largest company is now a maker of industrial automation systems, highlighting the rising importance of a less visible sector to a nation long associated with consumer-facing brands.Keyence Corp., a maker of machine vision systems and sensors for factories, has jumped 19% this year to become Japan’s second-largest company by market value. At a valuation of over 11 trillion yen ($100 billion), it has overtaken telecommunications giants SoftBank Group Corp., and NTT Docomo Inc., which have jostled for the honor to sit behind Toyota Motor Corp. over most of the past decade.Keyence is famed for its dizzying profitability with an operating profit margin of more than 50%, among the country’s highest. That’s enabled by its “fabless” output model, according to analysts, with production of its array of pressure sensors, barcode readers and laser scanners outsourced to avoid high capital costs.Its industry-leading sales system creates bespoke solutions for clients, and its frequently listed as the highest-paying company in Japan. The surge in its shares has also benefited founder Takemitsu Takizaki, who has overtaken SoftBank’s Masayoshi Son by a good margin to become Japan’s second-richest man.“It’s got everything — high growth, high dividends and a high operating margin,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “It’s the type of long-term stock you want to leave to your kids or your grandkids.”Keyence has more than tripled in market value since early 2016. “We feel the sense of expectation from our shareholders,” said Keyence director Keiichi Kimura when asked to comment on the milestone. “We’ll do our best to live up to those expectations.”The rise has also underscored how important the country’s parts and robot makers have become to the stock market, shown in the weighting of companies that make up the the country’s benchmark Topix index. Japan stocks were once dominated by banks and automakers — but years of zero rates which now dip into negative have hurt the profitability of the former, while the importance of the latter was declining even before the coronavirus sent the industry into reverse gear.The weighting of the Topix’s Electrical Appliance sector, also home to the likes of Sony Corp., Murata Manufacturing Co., and Fanuc Corp., has increased to almost 15%, the highest in about a decade, as the importance of the Banks and Transportation Equipment sectors have declined. The Information and Communication sector, headed by the five listed companies that dominate Japan’s mobile carriers, is the second-most heavily weighted segment.The growing presence of IT shares has also been a feature in the U.S. stock market, with the sector making up the highest proportion of the S&P 500 Index since the dot-com bubble burst. The coronavirus pandemic has amplified a trend for investors to prefer companies that eliminate humans from the process — a trend Keyence benefits from both with its fabless production model, and by enabling companies to automate their own production.“It’s a business model that grows the more factory automation throughout the world progresses,” said Mitsubishi UFJ Morgan Stanley Securities’ Fujito.Founder Takizaki holds about 23% of Keyence’s shares, Bloomberg-compiled data show. For the Topix, which takes the free float of the shares into account in its weightings, those holdings mean Keyence is less heavily weighted than Sony, whose market value trails by comparison. Toyota the biggest company on the index, and even forecasting an 80% drop in profit this year, the automaker remains Japan’s largest business with a market value double that of Keyence.“We like Keyence as it outsources production instead of owning factories, allowing it to focus on R&D,” HSBC analysts including Helen Fang wrote in a May 26 report that initiated coverage of the company with a buy rating. “It also uses a direct-sales model that keeps it close to clients. This strategy means it can better capture market share in a widening array of industries and can focus on high-value client solutions.”While the coronavirus pandemic will depress profits this year, Nomura sees a recovery “to record-high profit levels” the following year and sees a record profit the next, analyst Masayasu Noguchi wrote in a report May 28 raising its target price on the stock.“It’s unclear how long the coronavirus pandemic will continue,” Keyence’s Kimura said. “The global uncertainty is likely to continue and in the midst of that we’ll continue to do what we can.”Factory Automation in Asia May Be First to Recover From PandemicThe notoriously tight-lipped Osaka-based company does not provide earnings guidance in its sparse quarterly disclosure. It’s an outlier in a country where companies are being encouraged to boost their transparency and communication with the market.“They are an efficiency-above-any-other kind of company, so doing extra that doesn’t result in revenue addition is probably less of a priority,” said Bloomberg Intelligence analyst Takeshi Kitaura. “They think generally those following the company are happy when they manage solid earnings and growth.”Yoshiharu Izumi, an analyst at SBI Securities Co., says that Keyence holds talks with shareholders and that reassures investors, and doesn’t view the paucity of disclosure as a problem. “Keyence has overtaken Sony, which is extremely proactive in responding to shareholders,” he said. “When Keyence starts putting energy into disclosure, that might be the time to sell.”(Updates with quotes from Keyence from sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.