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The 2014 All-Japan Research Team: OTC & Small Companies, No. 1: Mariko Watanabe

For a seventh straight year, Mariko Watanabe earns top honors, the UBS researcher’s ninth pinnacle appearance in the past decade.

Mariko Watanabe
UBS
First-Place Appearances: 9

Total Appearances: 11

Analyst Debut: 2003

For a seventh straight year, Mariko Watanabe earns top honors, the UBS researcher’s ninth pinnacle appearance in the past decade. “She is a huge asset to investors,” asserts one wealth manager, because “she’s the only one who understands the cycle and how this sector behaves.” Watanabe maintains ratings on 22 companies, four more than a year ago, while watching an additional 100. Two of the names she added to her portfolio last year are construction-equipment provider Kanamoto Co. and electronic-equipment retailer Hikari Tsushin. In April, citing demand from ongoing reconstruction in the aftermath of the March 2011 earthquake and tsunami in Tohoku, as well as its exposure to the market for retrofitting older structures, she dubbed Hokkaido-based Kanamoto a buy. Through mid-March the shares bolted 59 percent, to ¥3,220, besting the sector by 52.9 percentage points. Then, in October, she initiated coverage on Hikari Tsushin, also with a buy rating. The misunderstood Tokyo-based company, Watanabe says, was diversifying its product mix to include high-margin energy-saving appliances, office machinery, telecommunications services and even insurance. Moreover, it boasts strong cash flow, dividends and organic growth, she adds. The stock had jumped 24.3 percent by the middle of last month, to ¥8,390, while the sector declined by 2.5 percent. “She is a living dictionary on the sector and is responsible for convincing me it could generate alpha,” cheers another supporter.

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