China/US Tariffs Impacting Japanese R&A Company Valuations
|Company & PE (as of 1/21/2018)||2015||2016||2017||2018||Current||P/E Change 2017 to Present||Country||Ticker|
|Keyence Corp||33.53||39.99||29.83||30.17||1.14%||Japan||***2018 Comparison|
|Harmonic Drive Systems||31.19||30.66||-1.70%||Japan||***2018 Comparison|
|Yaskawa Electric Corp||26.12||40.04||20.37||20.15||-49.68%||Japan|
In a previous post (11/29/2018), we highlighted valuations for some of the largest robotics and automation companies in the world. At that time, we showed how those valuations had significantly dropped from March to November. We have seen investment move out of Japanese equities due to the China trade worries. Some of that industrial automation investment has moved to U.S. automation companies and others have set-up facilities in the United States which were viewed to have less tariff risk and to take advantage of lower corporate tax rates. It is our opinion that as soon as an agreement is made with China, the Japanese stock will surge. We feel that these robotics and automation companies are very undervalued and provide a buying opportunity. Regardless of potential tariffs imposed on China, investors should not overlook the increasing growth of the robotics and automation market worldwide.