2016 All-Japan Research Team: Metals, No. 1: Atsushi Yamaguchi
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2016 All-Japan Research Team: Metals, No. 1: Atsushi Yamaguchi

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With his first-place finish this year, UBS’s Atsushi Yamaguchi raises his number of trips to the winner’s circle to 14 in a row.

< The 2016 All-Japan Research Team

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Atsushi Yamaguchi

UBS

First-Place Appearances: 14


Total Appearances: 18


Analyst Debut: 1999


With his first-place finish this year, UBS’s Atsushi Yamaguchi raises his number of trips to the winner’s circle to 14 in a row. Among this year’s six currently top-ranked All-Japan Research Team Hall of Fame analysts, only Mitsubishi UFJ Morgan Stanley Securities Co.’s Nobuyuki Saji tallies more such appearances; he racks up 15 No. 1 showings on the Economics lineup. In his tracking of 17 Japanese metals companies, Yamaguchi wins praise for his experience, research skills and solicitude toward clients. “I can always count on him to follow up on all my queries by providing written reports without any delay,” remarks one fund manager. “His reports are very thorough and easy to understand, and he has a good grasp of trends.” Oversupply and market volatility inform the researcher’s cautious opinion on the domestic steel industry, although he sees Japan’s industry leader, Nippon Steel & Sumitomo Metal Corp., as an exception. Rated buy, the Tokyo-based steelmaker sports an improved balance sheet and the ability to generate free cash flow, he explains, and a round of cost-cutting should further lower already reduced production costs. Perhaps most important, management has announced “some unexpected business strategies,” notes Yamaguchi, “including the further restructuring of its domestic operations by making Nisshin Steel a subsidiary,” as well as “equity investments to expand its presence in the seamless-pipe market.” Nippon-Sumitomo is repurchasing shares, both to demonstrate its commitment to shareholder returns and to take advantage of the current low share price “in preparation for future corporate mergers,” he advises. All of these endeavors “come as positive surprises.” At ¥2,900, his price objective for the stock represents a 32.1 percent premium to its value in mid-March. The 50-year-old analyst is also touting Tokyo’s UACJ Corp., a global rolled-aluminum provider. That commodity’s market is expanding, thanks largely to a healthy automobile industry, he explains. Moreover, the manufacturer boasts the “highest earnings growth among the nonferrous metal smelters,” making it well situated to exploit its comparative advantage, and a new factory in Thailand should contribute to greater output. UACJ further benefits from the weakness in energy and oil prices, which eases production costs, Yamaguchi concludes. He believes that a share price of ¥430 is justified; the stock closed at ¥245 in mid-March.



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