The 2014 All-Japan Research Team: Machinery, No. 2: Katsushi Saito

Dropping to No. 2 after four consecutive years on top is Nomura’sKatsushi Saito, an All-Japan Research Team Hall of Famer who has appeared on this roster every year since 1997, including 12 first-place finishes. Although he slips this year, Saito is still regarded with near-reverence. “He’s one of the most veteran analysts in this industry and perhaps the most respected,” asserts one loyalist. Indeed, his reputation is such that “he has power to move stock prices regardless of whether his opinion is correct or not,” the backer adds. Among the researcher’s top stock picks is Tokyo-based THK Co. The world’s top linear-guide producer, with approximately 50 percent of global market share, THK offers plenty of upside, he says. “We are expecting 45 percent year-over-year growth for March 2015 operating profits,” Saito reports. Driving net income are “better margins at production facilities in Japan, expectations for sales growth in China, demand of producers of low-cost smartphones and a recovery in sales to the Japanese machine tool and semiconductor-production-equipment industries,” he explains. The stock jumped 7.7 percent within days of his rating it a buy in early February, at ¥2,245, before being dragged back to ¥2,121 in mid-March. Whether THK and its stock meet Saito’s expectations — his target price for the shares is ¥2,900 — bears watching. By all accounts, clients say, he is right much more often than he is wrong.