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Canon Stock Rises from Patents and New Developments

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Jan. 20 2016, Updated 12:48 p.m. ET

Canon’s price movement

Canon (CAJ) has a market cap of $38.2 billion. It rose by 1.4% to close at $28.04 per share on January 19, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases are -0.85%, -8.6%, and -6.9%, respectively.

Technically, Canon (CAJ) stock has broken the support and is trading below all moving day averages. Currently, Canon is trading 5.3% below its 20-day moving average, 6.5% below its 50-day moving average, and 12.7% below its 200-day moving average.

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The Guggenheim Defensive Equity ETF (DEF) invests 1.0% of its holdings in Canon. The ETF tracks an index that aims to outperform in down markets while maintaining upside potential. The equal-weighted index picks 100 US stocks using fundamental and dividend screens. The YTD price movement of DEF is -3.3%.

The competitors of Canon (CAJ) and their market caps are as follows:

  • Hewlett-Packard (HPQ) – $17.5 billion
  • Kyocera (KYO) – $16.9 billion
  • Xerox (XRX) – $9.0 billion

Canon’s activities

Canon (CAJ) ranked third for US patent holder in 2015. According to IFI CLAIMS Patent Services, Canon was granted 4,134 patents in 2015.

Canon has expanded its partnership with EFI, a digital printing company, to provide streamlined production workflow solutions that help users utilize Canon’s sheetfed, toner-based digital presses. It also offers time-saving, end-to-end workflow solutions to automate processes from order submission to print and fulfillment.

Performance of Canon in fiscal 3Q15

Canon (CAJ) reported fiscal 3Q15 net sales of 925,782.0 million yuan, a rise of 6.1% compared to net sales of 872,208 million yuan in fiscal 3Q14. Its net income and EPS (earnings per share) fell to 49,180 million yuan and 45.03 yuan, respectively, in fiscal 3Q15 compared to 58,249 million yuan and 52.67 yuan, respectively, in fiscal 3Q14.

In fiscal 3Q15, the company’s cash and cash equivalents fell by 31.2%, and inventories rose by 12.7% compared to fiscal 4Q14. Its debt-to-equity ratio fell to 0.41 in fiscal 3Q15 compared to 0.42 in fiscal 4Q14.

Canon’s PE (price-to-earnings) and PBV (price-to-book value) ratios are 16.4x and 1.3x, respectively, as of January 19, 2016.

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