Shayne Heffernan is still bullish on Japan Equities. Tokyo Hot Stocks, Ebara, Japan Railways, Idemitsu Kosan

According to Shayne Heffernan It is time to start buying Japan Equities as Japan’s Parliament introduces a 4 trillion yen ($49 billion) tsunami recovery budget, but it will cover only a fraction of the cost of what was the world’s most expensive natural disaster ever, and what may become the worlds largest ever reconstruction project.

The budget will cover the building of new houses for the more than 100,000 people who remain without proper shelter, the massive undertaking of clearing debris and rubble, reconstruction of fishing grounds, and support for disaster-hit businesses and their employers.

The March 11 magnitude-9.0 earthquake and ensuing tsunami, which wiped out large swaths of Japan’s northeastern coastline, are believed to have caused an estimated $300 billion in damage, making it the most expensive disaster ever.

Japan listed Idemitsu Kosan TYO:5019 has been upgraded to a strong buy with a 2012 price target of 15,000 JPY issued by Shayne Heffernan.

Idemitsu Kosan TYO:5019 acquired interests of 10%-40% in oil and gas production licenses in four blocks of Norway’s continental shelf, according to The Nikkei. Through a subsidiary, Idemitsu Kosan Co., Ltd. participated in joint bids with Chevron Corp., BG Group PLC and other partners in a licensing round held by the Norwegian government. The exploration phase will take the coming two to four years, during which development costs and production scale will be determined.

Idemitsu Kosan Co., Ltd. announced that it has raised its full-year consolidated outlook for revenue from JPY 3,440,000 million to JPY 3,550,000 million, operating profit from JPY 67,000 million to JPY 99,000 million, ordinary profit from JPY 63,000 million to JPY 95,000 million, net profit from JPY 26,000 million to JPY 40,000 million and earning per share from JPY 650.16 to JPY 1,000.24 for the fiscal year ending March 31, 2011. The Company raised its full-year outlook mainly due to the increased price of crude oil. According to Reuters Estimates, analysts on average are expecting the Company to report full-year revenue of JPY 3,450,000 million and net profit of JPY 29,500 million.

Idemitsu Kosan Co., Ltd. is a Japan-based supplier of petroleum and petrochemical products. The Company operates in five business segments.

The Petroleum Product segment is engaged in the import, refining and wholesale of petroleum products, the transportation and storage of crude oil and petroleum products, the import and sale of liquefied petroleum (LP) gas, and the manufacture and sale of lubricant.

The Petrochemical Product segment is engaged in the manufacture and sale of petrochemical products. The Petroleum Development segment is involved in the research, exploration and development of petroleum products.

The Coal segment is engaged in the research, exploration, development and sale of coal. The Others segment is engaged in the research, exploration and development of uranium and geothermal resources, the manufacture and sale of electronic materials, the purchase, leasing and management of real estate properties, and the provision of insurance agency services, among others.

	Company	Industry	Sector	S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago	–	25.26	33.37	8.16
Sales (TTM) vs TTM 1 Yr. Ago	–	27.64	34.56	10.40
Sales – 5 Yr. Growth Rate	1.92	19.28	13.48	7.56
EPS (MRQ) vs Qtr. 1 Yr. Ago	–	56.76	97.14	54.43
EPS (TTM) vs TTM 1 Yr. Ago	–	–	–	–
EPS – 5 Yr. Growth Rate	16.56	11.06	7.16	4.94
Capital Spending – 5 Yr. Growth Rate	-0.66	6.06	10.77	3.63

Ebara Corporation TYO:6361 has been upgraded to a strong buy today with a price target of 1000 JPY by Shayne Heffernan.

Ebara Corporation announced that it has maintained its consolidated full-year outlook for revenue of JPY 405,000 million, but raised the outlook for operating profit from JPY 20,000 million to JPY 26,000 million, ordinary profit from JPY 17,500 million to JPY 23,000 million, net profit from JPY 9,000 million to JPY 11,000 million and earning per share from JPY 21.32 to JPY 26.06 for the fiscal year ending March 2011.

The Company raised the profit outlook due to the cost down and the decreased tax. According to Reuters Estimates, analysts on average are expecting the Company to report full-year revenue of JPY 408,450 million and net profit of JPY 10,872.50 million.

In addition, the Company has also changed its year-end dividend forecast from an undermined value to JPY 5.00 per share, for the fiscal year ending March 2011.

Ebara Corporation TYO:6361 is a Japan-based manufacturing company.

The Company has four business segments. The Fluid Machinery and System segment is engaged in the manufacture and sale of pumps, fans, compressors, turbines, chillers and others, and the construction, transportation and maintenance of power plants.

The Engineering segment is involved in the construction, operation and maintenance of environmental improvement devices, incinerators, nuclear power related equipment, wastewater treatment and others, as well as the supplement of energy.

The Precision Machinery segment is involved in the production, sale and maintenance of industrial equipment for vacuum pumps and semiconductors.

	Company	Industry	Sector	S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago	–	11.42	8.78	7.61
Sales (TTM) vs TTM 1 Yr. Ago	–	3.35	7.97	9.61
Sales – 5 Yr. Growth Rate	-4.85	4.04	7.62	7.53
EPS (MRQ) vs Qtr. 1 Yr. Ago	–	82.72	83.87	44.34
EPS (TTM) vs TTM 1 Yr. Ago	–	–	–	–
EPS – 5 Yr. Growth Rate	46.01	2.91	12.78	4.95
Capital Spending – 5 Yr. Growth Rate	0.97	-0.49	13.77	3.60

Central Japan Railway Company TYO:9022 is undervalued and has been upgraded to a Must Own Stock by Shayne Heffernan.

Shayne Heffernan has put a 2012 price target of 1,000,000 JPY on the stock in a note to traders today.

He also noted that Central Japan Railway Company will form a business alliance with a special-purpose company of a United States-based company, Florida High Speed Rail, on bid tender of high speed railway construction business in Florida, United States.

Central Japan Railway Company is a Japan-based company engaged in four business segments.

The Transportation segment is engaged in the operation of Tokaido Shinkansen railways, as well as the conventional railways of the Tokaido area.

This segment is also involved in the bus transportation business.

The Distribution segment is engaged in the department store business, as well as the sale of merchandise in train compartments and stations.

The Real Estate segment is engaged in the real estate business, including the real estate leasing and subdivision businesses.

The Others segment is engaged in the hotel, travel agency and advertising businesses, as well as the provision of maintenance, inspection and repair services for its facilities.

The Company raised its full-year outlook mainly due to the increased number of customers. According to Reuters Estimates, analysts on average are expecting the Company to report full-year revenue of JPY 1,482 billion and net profit of JPY 111.059 billion.

Rating and Investment Information, Inc. (R&I) announced that it has affirmed the rating on Central Japan Railway Company at “AA”. The rating outlook is stable.

	Company	Industry	Sector	S&P 500
Gross Margin (TTM)	33.90	19.72	18.46	32.71
Gross Margin – 5 Yr. Avg.	35.42	26.65	23.56	30.76
EBITD Margin (TTM)	40.18	–	–	–
EBITD – 5 Yr. Avg	40.34	21.99	13.01	19.31
Operating Margin (TTM)	22.98	8.11	7.92	–
Operating Margin – 5 Yr. Avg.	24.20	11.33	8.82	14.85
Pre-Tax Margin (TTM)	14.95	5.31	8.07	15.67
Pre-Tax Margin – 5 Yr. Avg.	14.49	8.03	9.01	14.41
Net Profit Margin (TTM)	9.04	3.04	5.78	11.60
Net Profit Margin – 5 Yr. Avg.	8.64	4.64	6.06	10.63
Effective Tax Rate (TTM)	39.49	30.49	9.06	21.86
Effecitve Tax Rate – 5 Yr. Avg.	40.41	42.91	38.31	24.91

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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Heffernan Capital Management

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Posted by Shayne Heffernan on May 14th, 2011and filed underAsia, Equities, Latest News, Markets.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site