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2015 All-Japan Research Team: Machinery, No. 3: Yoshinao Ibara
Rising from runner-up, Yoshinao Ibara of Morgan Stanley MUFG Securities Co. recaptures the No. 3 position he held from 2011 through 2013.
Total appearances: 7
Team debut: 2006
Rising from runner-up,Yoshinao Ibaraof Morgan Stanley MUFG Securities Co. recaptures the No. 3 position he held from 2011 through 2013. “Economic cycles are important for the machinery sector,” says one investor, and “he tracks most of the important data globally and does a good job incorporating them in his earnings forecasts and investment recommendations.” Ibara, 40, is urging clients to jump into Komatsu, a Tokyo-headquartered industrial machinery manufacturer. “Buy at the bottom and wait,” he advises. The stock has taken a pounding, falling 21.1 percent from its December multiyear high point to close at ¥2,324 in early February before rebounding to ¥2,440 in late March. The researcher sees Komatsu as a good value play, with “downside becoming limited.” In addition, he is forecasting that China’s mining industry will provide a boost to performance in the second half of 2015, as ageing machinery is replaced. He’s much less sanguine, though, on the prospects for Osaka-based Keyence Corp., which he assigns an underweight rating. Despite its attractive features — the fabless manufacturer has a deserved reputation as a premier provider of factory automation equipment and systems, and it boasts an excellent business model with “a very high margin” — Keyence is too expensive, Ibara believes, and market expectations are too high. Indeed, investors sent the shares soaring 57.5 percent during the 12 months through late March, to ¥65,140, while the domestic sector climbed 36.1 percent. Moreover, he cautions, balance sheet management is still a concern. Although the leadership announced in October that it would boost Keyence’s full-year dividend payment from ¥60 per share to ¥200, the move was merely a response to shareholder impatience and does not indicate that “management’s stance changed substantially,” he contends. “We cannot expect much room for return on equity improving with the cash-buildup problem still unresolved.”