Nikon is a Good Buy

WestEndFotoWestEndFoto Posts: 3,264Member
I draw the link to the following article to everyone's attention.

https://uk.finance.yahoo.com/news/why-nikon-could-appeal-contrarian-082237334.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAABT797VzVJSD8To6D-QiHoZQx2GcGo1acHceRIldHzIm9ivbelZCOkoDRZ_UMfx9NcdDfR6MZgBX_AiaYJ-Y0CMDCAlYoxMGWehpA-d1MYiiYJ7XFW7lqbLVlaJQFar5wKdkuz4V4iVzE1tBPeLthT38qo8G8dm8GQkBG7GGFv57

While it is just one article and I acknowledge that there will be many people with the opposite view, I cite it as a well thought out position to the naysayers and doomsday prophets that promote the idea of Nikon's demise.
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Comments

  • PB_PMPB_PM Posts: 4,168Member
    edited May 14
    As a long term Nikon user I would love to agree, but cannot, because reality flies in the face of this viewpoint.

    Nikon was not a good buy before the stock market had a free fall, and it sure isn't one now. Nikon's sales and profit were projected to be negative even before the pandemic, and it's a lot worse now. Profit was up for a few years because Nikon simply increased the price of products significantly, to offset the massive drop in sales, but everyone knew that wouldn't last. The reality is the ship is sinking, Nikon may not die, because the Japanese Government will likely give them a bailout, but long term it won't be much different than Pentax, irreverent.
    Post edited by PB_PM on
    If I take a good photo it's not my camera's fault.
  • tc88tc88 Posts: 453Member
    @WestEndFoto, did you buy it then? If you truly believe it, you should put your money at where your conviction is. :smile: BTW, how many shares you buy also matters. 1 share with your net worth doesn't show much conviction at all, if not the opposite. :smile:
  • WestEndFotoWestEndFoto Posts: 3,264Member
    tc88 said:

    @WestEndFoto, did you buy it then? If you truly believe it, you should put your money at where your conviction is. :smile: BTW, how many shares you buy also matters. 1 share with your net worth doesn't show much conviction at all, if not the opposite. :smile:

    My investment strategy is different. I build my own index fund. I essentially pick a random stock on the S&P 500 and TSX using a random number generator in Excel. Every time I have $10,000 accumulated I hit the random number generator in Excel and pick a stock. About 3 times a year I buy a batch of international ETF that tracks to these indexes to keep me diversified across my home country Canada, the US and the rest of the world. There are no management fees this way except for the international ETF (non US and CDN) and that is only about 1%. The batches of $10,000 make it easy to track how that share has performed over time.

    So I don't put my money where my mouth is in stocks because my investment strategy is random. The only non-random thing I have done in years is convert all my stocks to cash on February 3 and 4th and then re-invest back in the market in mid-March. I got lucky but there was a carefully considered logic behind that move.

    All I am trying to say is that there are smart people putting their own money where it is worth. I am not saying they are right. I am just pointing out that the doomsday profits that are so sure about their convictions are idiots.

    And you know that I spend a lot on camera gear, so am I not putting my money where my mouth is there? If the doomsday prophets were correct I would by buying Sony gear.

    Now, one little quibble. I actually have not purchased much Nikon gear in the last couple of years. But that is because the right Z gear has not been released yet. So when that happens, and I am confident that it will, I will be "putting my money where my mouth is".
  • SymphoticSymphotic Posts: 665Member
    WEF: your approach sounds better than mine. I pick companies I know about and have worked with, and have some “skin in the game” but not rising to the level of being an insider. It used to work very well for me, but I’ve picked a couple of lame ponies in the last two years!
    About a year ago I greatly reduced all my equities holdings because the market seemed frothy to me, and now I am sitting on tiny losses compared to huge losses some of my colleagues have on paper. But I didn’t have the paper gains earlier in the year either. Your timing was better than mine.
    Nikon would be an investment opportunity if I thought they were a takeover target. Not because of the camera business, though: I’m still waiting for a 70-200 Z lens I ordered in January. If they can’t deliver, they can’t book the sale, so they aren’t performing well.
    I work with Saab. They have a very successful technologies business and I have the pleasure of supporting about 40 of their underwater imaging and inspection customers in North America, with many in your area. But years ago they divested their automobile business, and if you buy a “Saab” automobile, you get a product that is not made bay SAAB AB but by a completely unrelated company. I can see Nikon spinning off the camera business.
    Jack Roberts
    "Discovery consists in seeing what everyone else has seen and thinking what nobody else has thought"--Albert Szent-Gyorgy
  • PB_PMPB_PM Posts: 4,168Member
    edited May 16
    Nikon's camera business makes about 69% of the companies profits, spinning it off would basically kill the company. They are already killing off other optical products like scopes (sports and hunting IIRC) and binoculars, the latter of which I'm not 100% sure of. That would leave Nikon with nothing but dental and medical optics, an area they are heavily out competed with by larger competitors, and most of the sales they have in those areas are only in Japan. They also used to make glass for eye-glasses, but I don't know if they still do or not.
    Post edited by PB_PM on
    If I take a good photo it's not my camera's fault.
  • SymphoticSymphotic Posts: 665Member
    edited May 16
    Hello, PB_PM:

    My math comes doesn’t work out to your numbers. I only get 20% of their profits coming from imaging products. Last year you need to cut their profits from the precision equipment sector by a third to get ongoing performance in profitability, but that business (precision equipment) was the only part of Nikon that was both growing and profitable.

    I don’t like investing in businesses that have decreasing sales, although I just bought Boeing, as I think it is trading about 50% below it’s real value and I expect it will start to grow again. I could be wrong.

    Nikon 2019 results:
    Imaging Products Business: unit sales of both digital camera-interchangeable lens type and compact digital cameras fell amidst the shrinking market.
    As a result, revenue for the Imaging Products Business decreased by 17.9% year on year to 296,169 million yen, and operating profit decreased by 27.0% year on year to 22,069 million yen.
    Precision Equipment Business: revenue for the Precision Equipment Business increased by 21.3% year on year to 274,540 million yen. In addition, operating profit increased by 53.1% year on year to 81,730 million yen, due to the rise of profit in the FPD lithography system field, as well as the effect of recording a settlement income regarding litigation over patents in the semiconductor lithography system field, which resulted in the substantial increase of profit in the business as a whole.
    Healthcare Business: revenue for the Healthcare Business increased by 15.2% year on year to 65,434 million yen, and operating loss of 1,937 million yen (operating loss of 3,263 million yen was recorded in the previous fiscal year) was recorded.
    Industrial Metrology and Others: revenue for the Industrial Metrology and Others decreased by 1.0% year on year to 72,518 million yen, and operating profit increased by 38.0% year on year to 6,937 million yen.
    Post edited by Symphotic on
    Jack Roberts
    "Discovery consists in seeing what everyone else has seen and thinking what nobody else has thought"--Albert Szent-Gyorgy
  • Ton14Ton14 Posts: 577Member
    edited May 22
    For this kind of decisions I have been subscribed to the unbiased system "Socrates" by Marty Armstrong (The Forcaster) for about 15 years.

    You can test this for $ 15.- per month, monthly withdrawable, it takes some time to learn, but it is very clear.
    Post edited by Ton14 on
    User Ton changed to Ton14, Google sign in did not work anymore
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