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
OMRON Corp 17.17 23.37 23.59 15.72 14.33 -39.25% Japan
Nidec Corp 29.99 30.53 38.35 24.39 24.19 -36.92% Japan
Fanuc 19.70 29.75 34.61 18.22 20.50 -40.77% Japan
Daifuku 18.17 32.63 15.66 15.49 -52.53% 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.

Recent Posts