December 21, 2023
Top 10 Stock Aristocrat Buy Recommendation

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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 Aristocrat Buy

360 METRICS	December 21, 2023
VALUE
VALUE	33
GROWTH
GROWTH	33
SAFETY
SAFETY	59
SENTIMENT
SENTIMENT	94
360° VIEW
360° VIEW	51

ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock Aristocrat are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Aristocrat. The consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 59 or better than 59% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 33, meaning that the share price of Aristocrat is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 33. ...read more

RECOMMENDATION: With a consolidated 360° View of 51, Aristocrat is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 94) and safe financing practices (Safety Rank of 59), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Aristocraṭ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Aristocrat very positive

SENTIMENT METRICS	December 21, 2023
ANALYST OPINION
ANALYST OPINION	76
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	85
MARKET PULSE
MARKET PULSE	78
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	94

ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Aristocrat is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Aristocrat. Analyst Opinions are at a rank of 76 (better than 76% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Aristocrat. The Professional Investors rank is 85, which means that currently, professional investors hold more stock in this company than in 85% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 78 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 78% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Aristocrat has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Aristocrat stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more

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Value Strategy: Aristocrat Stock Price Value below-average critical

VALUE METRICS	December 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	56
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	25
DIVIDEND YIELD
DIVIDEND YIELD	49
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Aristocrat shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Aristocrat. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 56, which means that the stock price compared with what market professionals expect for future profits is lower than for 56% of comparable companies, indicating a good value concerning Aristocrat's profit levels. But Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than for 84% of comparable companies, indicating a low value concerning Aristocrat's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 25 and for dividend yield, which is lower than for 51% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Aristocrat's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Aristocrat is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more

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Growth Strategy: Aristocrat Growth Momentum low

GROWTH METRICS	December 21, 2023
REVENUE GROWTH
REVENUE GROWTH	31
PROFIT GROWTH
PROFIT GROWTH	26
CAPITAL GROWTH
CAPITAL GROWTH	54
STOCK RETURNS
STOCK RETURNS	75
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33

ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Aristocrat 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 Aristocrat. Capital Growth has a rank of 54, which means that currently professionals expect the company to grow its invested capital more than 26% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 75 (above 75% of alternative investments). But Sales Growth has only a rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Profit Growth is also low at a rank of 26. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, 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 Aristocrat, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more

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Safety Strategy: Aristocrat Debt Financing Safety above-average

SAFETY METRICS	December 21, 2023
LEVERAGE
LEVERAGE	52
REFINANCING
REFINANCING	50
LIQUIDITY
LIQUIDITY	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59

ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), the company Aristocrat 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 Aristocrat 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 Aristocrat. Leverage is at 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Refinancing is at a rank of 50, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Finally, Liquidity is also good at a rank of 63, which means that the company generates more profit to service its debt than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 59 (better than 59% compared with alternatives), Aristocrat has a financing structure that is 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

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Combined financial peformance: Aristocrat Below-Average Financial Performance

COMBINED PERFORMANCE	December 21, 2023
VALUE
VALUE	33
GROWTH
GROWTH	33
SAFETY
SAFETY	63
COMBINED
COMBINED	28

ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), Aristocrat (Casinos & Gaming, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Aristocrat are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives) and show below-average growth (Growth Rank of 33) but are safely financed (Safety Rank of 59), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 28, is a hold recommendation based on Aristocrat's financial characteristics. As the company Aristocrat's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 33) and low growth (Obermatt Growth Rank of 33), 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 59) 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. ...read more

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