This article introduces an approach to individual stock analysis that uses country- and product-level export statistics to identify which companies may see an impact on orders or sales, as well as methods for tracking the flow of goods before earnings are announced.
This article emphasizes the importance of tracking changes in overseas demand for Japanese companies through monthly data, rather than simply following earnings announcements. Export statistics, which show the “flow of goods” from Japan to overseas markets, may provide a more informative source than news about the Japanese economy alone.
It explains that breaking the data down along two dimensions, country and product, makes it easier to infer which companies are driving increases in orders for which products in which markets. When determining the reasons behind increases or decreases in exports, it is necessary to consider the three factors of volume, value and unit price together with regional trends and the locations of manufacturing facilities.
However, the article also cautions that an increase in exports does not immediately establish that a particular company’s orders or profits have increased. Factors such as yen depreciation, rising prices and changes in component composition cannot be attributed from the figures alone, making the process of formulating and testing hypotheses important. Finally, it states that linking this information to share-price movements requires the ability to “spot changes earlier than the market expects.”