Yasukawa Finally Corrects – Now We Like It

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As readers of my blog know, I’m a big believer in the growth of Robotics, the rationale for which you can view here. One of the best companies in this sector is Yasukawa, but the last time I discussed it, I suggested waiting for a better price as the company had been overbought.

Since then, the stock has dropped to $87.50, a 21% drop, where it seems to have found support. I previously suggested buying in at prices of $91 and lower. That time is now. What caused the drop? Here’s the take from the Nikei Asian Review:

Yasukawa, one of last year’s strongest-growing components on the Nikkei Stock Average, beat most peers to releasing earnings for the nine months through December, publishing its report after markets closed Tuesday. The showing was strong, with consolidated net profit roughly doubling year on year as the company seized on demand for factory automation in labor-short markets like China.

But in maintaining a forecast of 39 billion yen ($357 million) in net profit for the full year through March, the robotics company fell short of market predictions of 40.4 billion yen. It fell victim to “the market’s overly high expectations,” in the words of Yasuhiko Hirakawa at Sumitomo Mitsui Asset Management.

Remember the adage of buying when others are fearful? Now’s the time. Here’s what my technical crystal ball shows:

Click to enlarge


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