January 11, 2024
Top 10 Stock Ajinomoto Hold 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: Ajinomoto – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Ajinomoto is listed as a top 10 stock on January 11, 2024 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 29 (29% performer), Obermatt assesses an overall hold recommendation for Ajinomoto on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Packaged Foods & Meats |
| Index | TOPIX 100, Water Efficiency, Nikkei 225 |
| Size class | X-Large |
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 Ajinomoto Hold
| 360 METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 89 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 30 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 41 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 29 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 29 (better than 29% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ajinomoto are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Ajinomoto. The consolidated Growth Rank has a good rank of 89, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 89% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 8 means that the share price of Ajinomoto is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 92% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 30, which means that the company has a riskier financing structure than 70% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 41, indicating professional investors are more pessimistic about the stock than for 59% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 29, Ajinomoto is worse than 71% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 89), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 41), the company is rather risky when it comes to financing (Safety Rank of 30). The negative market view on Ajinomoto may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Ajinomoto compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Ajinomoto only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock Ajinomoto is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Ajinomoto. Analyst Opinions are at a rank of 28 (worse than 72% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Ajinomoto. More encouragingly, the Professional Investors rank is 96, which means that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 22, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 78% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), Ajinomoto has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Ajinomoto. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Ajinomoto Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), Ajinomoto shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Ajinomoto. Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than 85% of comparable companies, indicating a low value concerning Ajinomoto's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 11, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Ajinomoto. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 14 and Dividend Yield, which is lower than 75% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on Ajinomoto's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Ajinomoto? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Ajinomoto? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Ajinomoto may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Ajinomoto Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2024, Ajinomoto shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Ajinomoto. Sales Growth has a rank of 70 which means that currently, professionals expect the company to grow more than 70% of its competitors. Capital Growth is also above 40% of competitors with a rank of 70, and Stock Returns with the rank of 91 is also an outperformance. Only Profit Growth is low with a rank of 40 which means that currently, professionals expect the company to grow its profits less than 60% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Ajinomoto is a good growth stock. ...read more
Safety Strategy: Ajinomoto Debt Financing Safety below-average
| SAFETY METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 45 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 20 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company Ajinomoto has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Ajinomoto is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Ajinomoto. 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 20, 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 80% of its competitors. Leverage is also high at a rank of 45, which means that the company has an above-average debt-to-equity ratio. It has more debt than 55% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 30 (worse than 70% compared with alternatives), Ajinomoto has a financing structure that is riskier 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. ...read more
Combined financial peformance: Ajinomoto Below-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 89 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 60 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 34 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Ajinomoto (Packaged Foods & Meats, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Ajinomoto are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives), and are riskily financed (Safety Rank of 30, which means above-average debt burdens) but show above-average growth (Growth Rank of 89). ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Ajinomoto's financial characteristics. As the company Ajinomoto shows low value with an Obermatt Value Rank of 8 (92% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 89% of comparable companies (Obermatt Growth Rank is 89). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 30 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Ajinomoto, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.