Hamamatsu Photonics (6965.T)

(A Top Pick Nov. 21'17, Down 8%) They make parts for scientific instruments as well as the instruments themselves. They are the only producers of some sensors.

A tech company that detects very low levels of light and ionizing radation. Applications are in gene sequencer, blood analyzer, and semiconductor inspections. They are the only producer in the Western world. Ionizing applications: drilling and exploration for natural resources. They enable a lot of cutting-edge technologies. Returns on invested capital are nearly 30%. 20% profit margins. 10% R&D to sales. (Analysts' price target: Y5,020)

This company detects low levels of light and radiation. They make things like photomultipliers. Companies use their products in blood analyzers and gene sequencers and when analyzing semiconductors. Their type of equipment plays a role in anything going on in high energy physics. For example, photomultipliers provide the only way to visualize subatomic particles. This company is in a gatekeeper position for leading photonic technologies. (Analysts’ price target is 4450¥)

This builds components, which generally deduct very low levels of light or ionizing radiation. Also has sources that generate light and generate ionizing radiation. You can’t build a blood analyser or a gene sequencer without their equipment. You can’t build an optical chip inspection system. It is necessary for downhole tools for oil and gas, to measure while drilling. They’ve built equipment that dices semiconductor wafers down into individual chips. An extremely innovative company that does a huge amount of research and development. Has lived through major product lines, disappearing and replacing them repeatedly over a 40-50 year history. Really strong balance sheet. Business has started to turn around as optical inspection orders have started to come in. He is hoping for an upswing in the oil/gas equipment business. Dividend yield of 0.9%. (Analysts’ price target is ¥4.075.)