[Japanese Stocks] The “Double Upward Revisions for the Current and Next Fiscal Years” Strategy for Looking Ahead at Earnings, Featuring 12 Carefully Selected Stocks Including Advantest

The story

This article presents a carefully selected list of stocks whose analyst earnings estimates are being revised upward for both the current and next fiscal years, making estimate revisions the core of the investment strategy. It uses a measure called the “revision factor,” which combines the magnitude and recency of revisions, calculated from consensus data provided by QUICK Workstation Astra Manager. For stock selection ahead of earnings announcements, the size and recency of upward revisions are key considerations.

The article then sets out the specific stock-selection criteria. The universe consists of TOPIX constituents excluding financial companies with fiscal years ending in March. Stocks must have a market capitalization of at least ¥100 billion from a liquidity perspective, while tradability is also taken into account. Both the current- and next-fiscal-year revision factors must be in the top 20%, and the next-fiscal-year revision factor must exceed the current-fiscal-year factor.

The results of testing the strategy indicate that the importance of next-fiscal-year revisions tends to increase in the second half of the fiscal year. In particular, instances were observed in which stocks whose next-fiscal-year revision momentum exceeded that of the current fiscal year generated higher excess returns. From September through February of the following year, stocks with stronger next-fiscal-year than current-fiscal-year revisions frequently outperformed.

Specific examples include Advantest (6857) and Kioxia Holdings (285A), with the current- and next-fiscal-year revision factor values shown in a table. AI- and semiconductor-related companies are prominent among the top-ranked stocks, while the article emphasizes that next-fiscal-year momentum must exceed current-fiscal-year momentum.

The article concludes by introducing Monex Securities’ Kabutan Stock Scanner as a way to check the latest revision data, positioning it as a data source for future stock selection.

At a glance

Strategic requirementTarget stocks whose current- and next-fiscal-year revision factors are both in the top 20%, with the next-fiscal-year revision factor higher than the current-fiscal-year factor.

Those coveredTOPIX constituents excluding financial companies that have fiscal years ending in March and a market capitalization of at least ¥100 billion.

Data sourceAnalyst estimate revisions are calculated using QUICK consensus data.

ExamplesAdvantest’s current-fiscal-year revision factor is 6.70%, versus 9.24% for the next fiscal year.

Next-fiscal-year trendThe importance of next-fiscal-year revisions increases in the second half of the fiscal year, drawing attention to stocks whose next-fiscal-year momentum exceeds that of the current fiscal year.

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