Short term - short (but not in a position so just waiting), Medium + LT term long.
Why? Well a couple of reasons. Despite the retraction in sales and profits in the construction industry in Japan as evident from Ueki's results there are some rather signs of value.
I haven't even started a full accounting of undervalued Japanese stocks yet but can see that I will likely buy because:
- Ueki's market cap, for example, is almost 63% lower than its net assets. Compared to U.S. equities that is comparably significantly undervalued. As at December 2018 the average S&P 500 price to book ratio was 2.8 (and this was AFTER the December price drop). Compare that to a P/B value for Ueki of 0.35. i.e. The Company could be liquidated now and would return significantly more than the current price per share to investors.
- My TA points towards a significant appreciation of the JPY vs the AUD, USD, and EUR. If this happens, any returns will magnified. Despite its significant debt load (230% of GDP+) Japanese citizens are willing to take a financial hit buying government bonds with negative interest rates in order to support their Country.
- There are likely better, if not more undervalued, equities out there than Ueki. I feel encouraged to search for some deals.