HIGHER REWARDS, LOWER RISKS
No Verbosity,
Just Clear Actionable Information
Potential Reward: High
Potential Risk: Medium
Probable Holding Period: Long-term
Makita is a large producer of power tools. Most of our subscribers have probably seen Makita tools at Home Depot. Since entering the US market in 1970, Makita has become a leading tool provider in 30 countries. Makita has been shifting production away from Japan and has a manufacturing facility in the United States. We will not regurgitate financial data that is readily available on the internet. Our focus is to help our readers understand the case for buying this stock. At this time the stock satisfies all six screens of the ZYX Change Method.
- CHANGE SCREEN
It is estimated that $300 billion will be spent rebuilding Japan.
It is a no brainer that sales of power tools will boom. Makita
is the leading player in Japan.
Further, the global economy is recovering and there is likely to be a tail wind behind Makita's sales outside Japan.
GLOBAL FUND FLOW ANALYSIS SCREEN
Data shows that institutions have been aggressively buying Makita
since the earthquake.
THEORY ZYX CHANGE SCREEN
Makita's main manufacturing plant in Japan
is located in Okazaki City, about 500 km away from the epicenter of
the earthquake and damaged nuclear plants.
Since the earthquake, Makita has continued to ship products in a
routine manner without any delays. It also appears that
Makita's supply chain in Japan is stable.
QUANTITATIVE ANALYSIS SCREEN
Based on the global economy growing at an average of four percent per year and $300 billion being spent on reconstruction in Japan over the next two years, two years out our target is $60.00.
TRIGGER EVENT SCREEN
The trigger event here is the reconstruction spending in Japan.
TECHNICAL ANALYSIS SCREEN
This screen is positive for a long term buy but indicates a short term pull back is possible. Such a pull back will give us a buying opportunity.
Often success in investments is the result of patience and not chasing the prices. Investors may keep a watch on this stock and consider buying on pull backs. It is usually best to scale in heavily near the bottom of the Buy Zone and lightly near the top of the zone. Investors buying this stock in the United States should use limit orders and buy in small increments. Those with direct access to Tokyo should consider buying it in Japan.
Buy Zone $ .37.00 - $40.00
Target Zone $ 58 .00 - $ 60.00
Stop Zone: $ 33.73 - $ 34.73
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