Industries – Paper & Textiles: First
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Industries – Paper & Textiles: First

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Akiko Kuwahara

Bank of America

Merrill Lynch

"She judges companies in the paper industry based on a long-term outlook by precisely analyzing financial data, statistics and quality of the management."

For a third straight year, Bank of America Merrill Lynch’s Akiko Kuwahara comes out on top; the 39-year-old also captures third place in Ceramics & Glass. “Her deep analysis is always valuable,” declares one client. Stocks have been climbing thanks to low price-to-book ratios, expectations of higher prices for printing paper and a decline in paper imports because of the weak yen, the analyst explains. “In addition, inventories have started to decrease, however incrementally, and margins decline, largely because of excessive price competition,” Kuwahara notes. “The question is whether these companies can implement sufficient price hikes” to offset higher input expenses. One potential bright spot: Tokyo-based Oji Holdings Corp. “The company has been aggressively expanding its overseas business in recent years, and if this can drive topline expansion, that might provide unique growth possibilities relative to other Japanese paper companies,” she believes. With regard to textiles, Kuwahara expects global demand to recover moderately, but as with the paper industry, “one problem is that upstream prices and raw materials costs have started to increase,” she says. “To maintain margins each company’s pricing power and relationships with users should become increasingly important.” Kuwahara continues to favor Tokyo’s Toray Industries, a stock she has been recommending since August 2010. — Leslie Kramer


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