Fact based stock research
Hitachi (TSE:6501)

JP3788600009

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Hitachi stock research in summary

hitachi.co.jp

ANALYSIS: With an Obermatt Combined Rank of 58 (better than 58% compared with investment alternatives), Hitachi (Industrial Conglomerates, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Hitachi are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 45) but are safely financed (Safety Rank of 54), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 58, is a buy recommendation based on Hitachi's financial characteristics. As the company Hitachi's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 54) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	45
Safety Rank	54
Combined Rank	58

Country	Japan
Industry	Industrial Conglomerates
Index	TOPIX 100, Human Rights, Water Tech, Nikkei 225
Size class	XX-Large

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Hitachi

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	95	78	63	49
GROWTH
GROWTH	64	11	15	45
SAFETY
SAFETY	23	49	63	54
SENTIMENT
SENTIMENT	n/a	26	39	^new
360° VIEW
360° VIEW	n/a	30	37	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Jan-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Hitachi is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	95	78	63	49
GROWTH
GROWTH	64	11	15	45
SAFETY
SAFETY	23	49	63	54
COMBINED
COMBINED	72	49	52	58

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Hitachi the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Hitachi shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Hitachi. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than 57% of comparable companies, indicating a good value concerning to Hitachi's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 34, meaning that dividends are expected to be lower than for 66% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 63% of alternatives (only 37% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 54% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Hitachi's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Hitachi could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Hitachi looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	98	81	64	57
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	93	79	58	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	55	55	37
DIVIDEND YIELD
DIVIDEND YIELD	80	45	41	34
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	95	78	63	49

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hitachi; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Hitachi shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Hitachi. Capital Growth has a rank of 67, which means that currently professionals expect the company to grow its invested capital more than 20% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has only a rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Profit Growth is also low at a rank of 20. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Hitachi, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	35	1	4	1
PROFIT GROWTH
PROFIT GROWTH	38	24	36	20
CAPITAL GROWTH
CAPITAL GROWTH	n/a	38	27	67
STOCK RETURNS
STOCK RETURNS	88	87	73	91
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	64	11	15	45

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hitachi.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Hitachi has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hitachi is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Hitachi. Liquidity is at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 33, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 67% of its competitors. Leverage is also high at a rank of 44, which means that the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Hitachi has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	14	39	48	44
REFINANCING
REFINANCING	76	29	31	33
LIQUIDITY
LIQUIDITY	23	59	58	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23	49	63	54

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hitachi and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	72	62	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	47	68	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	18	77	^new
MARKET PULSE
MARKET PULSE	n/a	21	18	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	26	39	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hitachi.
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