Stockchase Opinions

Lorne SteinbergSony Corp. ADRSNESELLMay 27, 2021

Going through a revolution. Trying to reposition as a major global content provider, a la Disney. To hold this stock, you really have to believe in it. He doesn't like to bet on that kind of thing.

$106.01

Stock price when the opinion was issued

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DON'T BUY

Their main drivers are Sony Playstation, Sony Music, and films. The Playstation has its ups and downs from competition. Music is well behind the #1 player. Films are also unpredictable. Sony should spin off its music publishing business and focus on the other two areas. Not a cheap stock. Earnings vary. 

DON'T BUY

Not great over the years, suffering from a bloated infrastructure and lacking focus, like many Japanese companies. It should be split into a few companies.

HOLD

Still decent room to run, about 20%. 45% market share in the sensor market. Entering the smart mobility space. Hold on. Shouldn't go under $82.50.

(Analysts’ price target is $110.35)
HOLD

Has done well. Well run, but US is the place to look for tech. You'll probably do OK with it, as technology will continue to encroach into the economy and everyday life. This will benefit the sector, and Sony will take its share.

DON'T BUY

It's the Japanese Disney in that it holds some content, influence by the fate of new releases. The only fault are its mixed financial results. Otherwise, a quality company. Another concern is Japan's deep debt and the effect on Japanese companies. Doesn't want to be exposed to potential currency weakness.

TOP PICK

Diversified. PlayStation had supply chain disruption, but now picking up. One of the 3 main music companies, and that business has seen a resurgence with streaming. Lots of potential for cross-synergies between shows and gaming. Really good IP. Yield is 0.62%.

(Analysts’ price target is $118.88)
DON'T BUY
Japanese companies are managed differently. There are times to own them. It's been pretty much flat to the year, doesn't see much growth for the next year. He'd pick some of the US tech companies instead.
TOP PICK
Q4 results topped expectations. Spiderman game and PlayStation doing well. Market leader in gaming consoles, 64% market share. 44% market share of sensors. Lots of horses in stable. 12-month average price target is $130. Yield is 0.60%. (Analysts’ price target is $145.56)
PAST TOP PICK
(A Top Pick Mar 31/21, Down 8%) Really likes it. Still has a 2-2.5% position. Great upside runway. 44% market share of the sensor market. Leader in gaming consoles, at 64% market share. Also in smart mobility. (Analysts’ price target is $149.00)
BUY
Japan's Sony is into semis as well as electronics. It has partnered with MSFT to produce smart technology in cameras and video.
HOLD
Great company. Exposure to gaming consoles, subscription services, in-house content, and music. High-quality image sensors, which is tied to smart phones. Consumer electronics division is more difficult, but not enough to dent the overall picture.
PARTIAL BUY
12-month price target of $137. Meat and potatoes is image sensors, where it has 44% market share, 64% market share in gaming consoles. Pushing car infotainment and into smart mobility. You could buy some around $111-112, and some more down around 105.
BUY
With the holiday season coming, buy. This is worth a lot more. Buy now or on a dip.
DON'T BUY
He doesn't know it well. Their ROE has been good for the last three years, but negative during 2009-2015 (doesn't know why--management change, product issue?). Point is, ROE is inconsistent and that's a dealbreaker for him.