Undervalued Sony Poised to Rise 39%, Oasis's Fischer Says

  • Chief Executive Kazuo Hirai has overseen turnaround since 2012
  • Sony has great businesses, corporate governance, Oasis says

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Oasis Management’s Seth Fischer said shares of Sony Corp. are undervalued and could rise as much as 39 percent.

The stock advanced as much as 1.3 percent in early trading in Tokyo Thursday to snap two straight days of declines, at one point heading for its highest closing level since August 2008. The benchmark Topix index was little changed.

The chief investment officer of the Hong Kong-based hedge fund recommended the Japanese firm at the Sohn Conference on Wednesday, citing a massive turnaround since Chief Executive Officer Kazuo Hirai took the helm in 2012. People’s devotion to gaming and the growth potential of the company’s television business within its entertainment unit are two of Sony’s strengths, he said.

Under Hirai, Sony has restructured businesses, jettisoned unprofitable businesses such as its Vaio personal computer unit and reduced headcount. Fischer also cited what he sees as good corporate governance at the Japanese company, including targeting return-on-equity of more than 10 percent and appointing a majority of independent directors.

Sony shares had risen 26 percent this year through Wednesday, outperforming the benchmark Topix index’s 5.2 percent gain.

Fischer said some of the best investing ideas are sometimes hidden in plain sight, noting how the so-called FANG stocks -- Facebook Inc., Amazon.com Inc., Netflix Inc. and Google parent Alphabet Inc. -- have driven the U.S. stock market higher. Sony is another example, he said.

At last year’s Sohn Conference in Hong, Fischer presented a bearish thesis on robot-suit maker Cyberdyne Inc. The stock has fallen more than 40 percent since then.

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