Nikon Stock

HarleyFrank

For all those unhappy D600 owners who are wishing bad things for Nikon, you got your wish. Perhaps Nikon's stock crash is the reason no refund or adjustments were offered to D600 owners with recurring oil/dust on their sensors. After all, some of the biggest Nikon stock owners are executives and employees. If they get no return on their investment, D600 owners get no love. Thoughts?

ChasCS

Boo, Nikon is going strong bud.
There are distributors of their stuff in every major and minor city, these awesome products are sold world wide.
There are thee two biggest players, Nikon is one...

WestEndBoy

Nikon has alot of strengths, that is the good part.
Nikon has alot of strengths, that is the bad part.

It is good because Nikon has the resources to adjust to the change in the market.
It is bad because management and ownership may not have the urgency to adjust to a change in the market that "might" result in entire parts of their business being pulled from under them - compacts, Nikon 1, DX....

Photobug

For those that missed the Nikon posting on the main blog, back up and read it. Nikon sales are in the toilet. They will survive but it's going to take some sharp management and avoiding paying for free upgrades from D600 to D610 is not free but it's a cost of doing business. Don't expect that D600 customers will like this.

HarleyFrank

I didn't mean to imply Nikon was in some kind of permanent trouble. This has happened before, it will happen again. I meant to connect their stock fall to the lack of any adjustment for D600 owners.

dissent

Hmm. Acquisition target?

shawnino

I AM | NOT SURPRISED

Yeah, OK, I still don't believe that article I posted for discussion a couple months back that Nikon would be "gone" in five years. But Nikon needs to do a better job in figuring out how to grow sales. Simply (what I would consider) overcharging by 25% for new products won't get it done. My own few suggestions:

--Nikon needs a mirrorless system with a larger sensor than the 1-series.
--P&S is a losing battle medium-term as camera phones get better.
--Nikon needs to decide what to do with DX, and let everybody know what they've decided.

TaoTeJared

The D600 had little to do with this, nor will there ever be a free upgrade/replacement - that's would never be a consideration. D600 users disappointment is not remotely considered in their stock price - it's all about the numbers. No smart investor focuses on a single product when they have 100s like Nikon does - they are not Apple. It doesn't help abstract confidence though.

That said, I have rarely ever seen a company lower forecast numbers multiple times in a fiscal year - that is really bad, I mean really, really bad. May actually speak to management's reluctance to admit to their performance just as they fail to fully admit to D800 Left focus issue, D600 shutter, Sb-900 overheating, and other issues. The market sales is what it will be, but how management reacts, and INFORMS INVESTORS is key - Nikon has failed on the former. It is better to take a big hit and really over lower numbers and over perform than to stair step it down. That is horrible management - and I'm willing to bet a bunch are gone soon.

I agree with dissent, Nikon is now an acquisition target for sure. That doesn't mean anything will change (brand/product wise) but this would put them in a potential 12-15% gain in stock price which will be tempting to many. I would think many private equity companies will be looking at this for sure. Bad part about that is it will probably be like the Pentax/Ricoh where Pentax was basically inactive for a couple of years for Ricoh to straighten them out.

A DX mirrorless system I think is key and also to drop the price of the CX (Nikon 1) system drastically. The more and more I play with the 1-series system, it is a really good system and the IQ is good enough. That said, a V2 is not worth more than a D3200 though. That is just a joke.

P&S could sell if someone could figure out a much better way to incorporate (pair) it with a smart phone where they work flawlessly together. Sony is making a good first step with the Cyber-shot QX Series and their P&S. If you can make the marriage between devices seamless then the convenience is not diminished, people will buy them as an accessory to their phone. I think if someone would create a "phone case" camera (camera that is a phone case,) then that would be a hell of a system that people would buy.

DX is here for another 5-10 years (at least), and it will remain a consumer system for soccer moms to take photos of their little Johnny and Sally. That is just a price point thing. I think enthusiasts will be pushed to FX by the lack of an expanded DX lens system. Even if people don't like it, it would be the smart business play.

Golf007sd

Personally, I do not see Nikon being purchased by anyone at the moment. As an investor, remember the old saying: Buy low....sell high. This would be a good time to play a little buy and hold and see where the chips fall.

WestEndBoy

Shawnino said:
--Nikon needs a mirrorless system with a larger sensor than the 1-series.
--P&S is a losing battle medium-term as camera phones get better.
--Nikon needs to decide what to do with DX, and let everybody know what they've decided.

I agree with your three points and add my comments below:

I think that they should come out with a DX size replacement for the 1 - series. The CX is not enough of an improvement over an IPhone. Anything larger than the DX, and the camera will start to become to big/heavy for many people. I think that they should do this as soon as possible. Note that the new DX will not be compatible with he old DX without an adapter due to the flange sensor length.

They should milk P&S and abondon it when there is nothing left to milk. The exception in my mind will be "Coolpix A" type cameras with DX or larger sensors. I believe that those have a future.

DX should also be milked until FX comes down in price to D3100/3200 territory. This is a matter of when, not if. Then they should abondon it.

Additionally, they should come out with a mirrorless interchangeable lens system that is significantly larger than FX to complement their DX. Think a digital version of the Fuji GW690s, but perhaps with a 60mm by 40mm sensor. This would be very balsy and would instantly turn Nikon into a quality leader and be attractive to Leica customers if they did it right. This would be a very expensive camera initially. They might have to wait two or three years for the initial launch for the price to be less than $10,000 with sensor prices continuing to deflate, but they could spend that time on R&D for the system and do a good job. Yes the first camera would be a fortune, but so was the D1. It only took about 10 years for the D1 sensor size to come down to about $500.

And finally, keep focussed on making FX the best that they can.

shawnino

OK @golf007sd, I'll bite: how can you possibly advise buying a stock when management is not only unable to build shareholder value, but is either too stupid or too deceptive to be able to give reliable guidance even 3-6 months out?

I'm all for buying low and selling high, but until management is replaced here, what you're advocating is trying to catch a falling knife.

Not sure who said it (it sounds like something Warren Buffett would say) but the quote is something to the effect that it's better to buy stock in a great company at a fair price, than to buy stock in a fair company at a great price.

I have zero faith in Nikon management at this point. Somebody, please show me a new management team, or show me a few decent quarters strung together by the current bunch of clowns (good luck with that).

WestEndBoy

Alot of people seem to be writing Nikon's management team off, yet performance has only sufferred for a year or two in a changing market where the competitors are arguably doing worse.

I think that it will be a while before enough is known to critique Nikon's management today.

Golf007sd

@shawnino: This type of capital investment is what I refer to as: speculative investment. You are going to invest for the long term with capital that you are willing to take a lose on in the short time while the institution goes threw its change. It is not easy to say which is the right time. When a stock hits close to their 52-week low, I have a tendency to put them on my watch list, then see what it does for a month or two. If it hold within $2-3 dollars of its 52-week low then I say it has found "it's base." At this point, I feel confident in a buying. Note, you will never be able to buy at the very bottom, thus get in at a time that you feel is palatable for you. Sit back and see how it goes and remember you are looking at least 2 years down the road in positive return. If management chance in that time frame, the odds are in your favor on an upward movement in stock price.

@jshickele:

--Nikon needs to decide what to do with DX, and let everybody know what they've decided.

I believe the D7100 and the new D5300 shows that Nikon is committed to the DX line of sensor/bodies. They realize that those that want more that a P&S will most likely move towards a DX due to its pricing structure...be it body as well and lens line-up.

Ade

Golf it seems Nikon thinks that price-sensitive customers who just want more than a P&S will eventually move towards Nikon 1, not DX. With FX falling in price, the long term commitment to DX is a fair question.

As for investing in Nikon, basic strategies work quite well when a lagging company is turning around. However, when the whole industry is rapidly shifting due to a "disruptive" change, all bets are off.

We've seen it recently with Nokia and Blackberry. And many of my fellow Canadians thought Nortel found its base when it fell from $100 all the way down to $10. How low could it go? Within months Nortel traded below $1, got delisted, and that's all she wrote. Many of those people who thought they had a bargain at $10 lost everything. Hopefully Nikon's fate will be more certain, but there's no guarantee of that.

WestEndBoy

I would be interested in how Nikon is doing with steppers. That is a big part of their business.

Ade

Very poorly. The stepper/scanner business is very tough going right now, not only because capital spending is down across the board, but also because another disruptive change: the transition from PCs to tablets, which require less components.

In addition to the tough industry situation, three other factors are killing Nikon:

1. There is a Dutch company called ASML that's been eating everyone's lunch. Nikon's marketshare has plunged from 60% a decade ago to about 16% (!) today, while ASML now controls about 80% of the market.

2. There is a next generation tech coming out (Extreme Ultraviolet Lithography) and Nikon R&D is lagging far behind. ASML holds key EUV patents and will probably start introducing EUV products in 2015. Nikon is projecting their EUV products will be ready no sooner than 2018.

3. Nikon doesn't have many customers. In fact, nearly 50% of all Nikon's scanners are purchased by just one company: Intel. The problem is, last year Intel became a major ASML shareholder, committing up to $4.1 billion dollars in ASML to accelerate EUV technology. Very bad news for Nikon.

Nikon's stepper business is only viable because the industry thinks ASML's effective monopoly is bad for everyone. So Nikon -- plus to a lesser extent, Canon and other smaller players -- are being kept alive with smaller orders to counter ASML's dominance.

Golf007sd

@Ade: I would argue that FX is not falling in price, but that Nikon is introducing different price point within their FX line, in order to provide their consumer base a step up into the full frame DSLR market.

As an investor, you need to have a keen-eye. When everyone is running to the hill like sheep, that is when a wolf comes out and look for a good catch. A savvy investor does not run with the pack, he hunt in an area where others don't. Patience is the key. Your friends that bought into Nortel or Blackberry, should take my strategy into consideration. Those stocks may have not found their "base."

Ade

Golf, look at NRTLQ historical prices. You'll see that by your own criteria set above, Nortel "found its base" in the $8 to $10 dollar range from March to July 2008 after hitting a 52-week low, before the price sharply plunged towards zero.

Your criteria matching Nortel's condition: "When a stock hits close to their 52-week low, I have a tendency to put them on my watch list, then see what it does for a month or two. If it hold within $2-3 dollars of its 52-week low then I say it has found "it's base.""

Golf007sd

@Ade: Hence, speculation money. Let the investor know how much to risk. After all: No risk no reward. Win some, lose some...that was the nature of the game in 2008. Moreover, that time frame was not a good time to be in the markets if you are risk averse. If you are scared of playing the market then don't. I do what works for me...your milage may vary.

Case in point Blackberry: Jan 14, 2008 close at $88.56 stayed around their till Feb. and then pop. Closed at $144.56 on July 16, 2008. I was in and out on that stock a bunch of time in 2008 and 2009.

shawnino

@golf007sd: So I think you're conceding that this is very much a gamble ("speculation money") and in no way a sound investment.

In some sense the whole stock market is a gamble, I agree. I guess what I'm saying is that the metrics I look for (sales growth, management that can see past the end of its nose) don't apply to Nikon.

I think you're also pointing to technical analysis (base-building etc.) but even technically this stock is a loser. If you bought the very top of the S&P before the crash (oops) you bought in at 1565. If you were able to hold on, the S&P is now at 1807. Nikon's top was $35, and is currently $19.
http://data.cnbc.com/quotes/ninoy
There's probably another dollar or two there in dividend, so call the effective price now $21 just to be safe. So down 40% over six years. The technical patterns in that period, even in hindsight, don't suggest a way to trade in-and-out of the stock.

If anybody can show me either a technical or a fundamental reason to buy Nikon, I'd love to do it, as I like to buy stock in products I have an affinity for. As it is, the stock's a loser and every time management opens its mouth it's to lower guidance.

Do I play the stock market? Sure. Do I advise others to? Yes. Can I find 100 stocks with a better shot at going up than Nikon? Absolutely. This is a camera forum, not a stock picking forum, but if you want a stock inside the space with a good story and an awesome chart, a dividend that'll cover your costs, reasonable multiple and fairly aggressive Beta, look at SanDisk (SNDK: NASDAQ). Full disclosure, I'm long ("I own it"):
http://data.cnbc.com/quotes/SNDK

TaoTeJared

Just a quick look I would put Nikon's stock's floor at around $15-$17, it's close to it's bottom for sure and I see it as a $25ish company at the moment. Even at it's $19 today, $19 to $25 is a 30% gain - that is a big gain for someone. I just noticed the volume was really high lately - lots of movement, my guess it is the computers banging away at it.

Nortel really is a bad comparison, it had a slew of issues, and a behemoth of Cisco which is just masterfully ran to contend with. The Blackberry debacle would be scary if that is what Nikon has. That was just a continual brain fart of a dual CEO experiment with poor middle management that just failed. I don't see the conditions around Nikon are the same. Pentax on the other hand, is fairly close but that was many years worth of loosing market share. Nikon isn't that yet. Nikon is just one of those "island" companies that really just stands on it's own little segment. They have other businesses that help their camera division, but they are the only predominately (majority of sales) Camera company still out there that is traded.

As for trading styles, there are many out there, and everyone has to make decisions based on their own situation and what they are comfortable with. What is horrible looking to one, is a gold mine to another. Fact is that Nikon has been down before, lets just hope they bounce back as they did before.

Golf007sd

@shawnino: All valid points. I, too, find it worthy to invest in company that I have purchased their goods. With respect to Nikon, it is a wait and see game. Lets just keep and eye on it and see what it does in the coming year. :P

kyoshinikon

While it certainly isnt a move for the professional investor, there is nothing wrong with picking up a few nikon stocks when they are low. Given their reputation and product base they will bounce back at some point. Sales for point and shoots are down so they may want to rethink their overhead.

Ade

FYI Nikon stock hit 52-week lows intraday in Tokyo a few minutes ago, before recovering slightly (but still currently down, -1.88% for the day).

Nikon stock has fallen 17% since this thread started and 21% since December. That's a big hole to cover, however you look at it. I hope no one really thought that long on Nikon was a good idea. 8-|

Nikon's fiscal year ends next week and unless they post solid results, it's seems certain that the stock will break under the psychological 1,600 yen support. If that happens we could be testing 3-year lows in the near future.

Nikon's business still has a lot of positive qualities, but sr. management really needs to get their act together.

Photobug

FYI Nikon stock hit 52-week lows intraday in Tokyo a few minutes ago, before recovering slightly (but still currently down, -1.88% for the day).

Nikon's business still has a lot of positive qualities, but sr. management really needs to get their act together.

+1

TriShooter

Interesting read. I was over at Fry's Electronics this week, and noticed they were blowing out most pf their their P&S Cameras. Their comment was people are using smart phones so they intend to offer a significantly smaller selection, and maybe none soon.