December 21, 2023
Top 10 Stock AGL Strong Buy Recommendation
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.
Snapshot: AGL – Top 10 Stock in Australian Securities Exchange Index ASX 100
AGL is listed as a top 10 stock on December 21, 2023 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for AGL on December 21, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View AGL Strong Buy
| 360 METRICS | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 86 |
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| SENTIMENT | ||||||||
| SENTIMENT | 10 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock AGL are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for AGL. The consolidated Value Rank has an attractive rank of 93, which means that the share price of AGL is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 86. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 10. Professional investors are more confident in 90% other stocks. The consolidated Growth Rank also has a low rank of 31, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 69 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, AGL is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 93), and the financing structure is on the safer side (Safety Rank of 86). However, sentiment in the professional investor community is below-average (Sentiment Rank of 10), as is the growth momentum for the company (Growth Rank of 31). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for AGL negative
ANALYSIS: With an Obermatt Sentiment Rank of 10 (better than 10% compared with alternatives), overall professional sentiment and engagement for the stock AGL is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for AGL. Analyst Opinions are at a rank of 73 (better than 73% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 38, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in AGL. The Professional Investors rank is also low at 10, meaning that professional investors hold less stock in this company than in 90% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 21, which means that the current professional news and professional social networks are critical of this company (more negative news than for 79% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 10 (less encouraging than 90% compared with investment alternatives), AGL has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: AGL Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2023, AGL shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for AGL. Price-to-Sales is 79 which means that the stock price compared with what market professionals expect for future sales is lower than for 79% of comparable companies, indicating a good value for AGL's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 78% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 62. Compared with other companies in the same industry, dividend yields of AGL are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on AGL's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in AGL based on its detailed value metrics.
Growth Strategy: AGL Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), AGL 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 AGL. Profit Growth has a rank of 90, which means that currently professionals expect the company to grow its profits more than 90% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has a below the median rank of 22, which means that, currently, professionals expect the company to grow less than 78% of its competitors, and Capital Growth also has a lower rank of 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for AGL. ...read more
Safety Strategy: AGL Debt Financing Safety very solid
| SAFETY METRICS | December 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 68 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
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ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2023, the company AGL has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of AGL 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, where all three are above average for AGL. Leverage is at 60, meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors. Refinancing is at a rank of 68, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 68% of its competitors. Finally, Liquidity is also good at a rank of 56, which means that the company generates more profit to service its debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), AGL has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: AGL Top Financial Performance
| COMBINED PERFORMANCE | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), AGL (Multi-Utilities, Australia) shares have much better financial characteristics than comparable stocks. Shares of AGL are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 86, which means low debt burdens), but show below-average growth (Growth Rank of 31). ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on AGL's financial characteristics. As the company AGL's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 31) while being safely financed (Obermatt Safety Rank of 86), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 93% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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