September 28, 2023
Top 10 Stock ASX Sell 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: ASX – Top 10 Stock in Australian Securities Exchange Index ASX 300
ASX is listed as a top 10 stock on September 28, 2023 in the market index ASX 300 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 safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 11 (11% performer), Obermatt issues an overall sell recommendation for ASX on September 28, 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 ASX Sell
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| SENTIMENT | ||||||||
| SENTIMENT | 12 |
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| 360° VIEW | ||||||||
| 360° VIEW | 11 |
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ANALYSIS: With an Obermatt 360° View of 11 (better than 11% compared with alternatives), overall professional sentiment and financial characteristics for the stock ASX are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for ASX. The only rank that is above average is the consolidated Safety Rank at 92, which means that the company has a financing structure that is safer than those of 92% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 18, which means that the share price of ASX is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 15, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 12, which means that professional investors are more pessimistic about the stock than for 88% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 11, ASX is worse than 89% of all alternative stock investment opportunities based on the Obermatt Method. This means that ASX shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 12. The negative market view on ASX may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. 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. 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
Sentiment Strategy: Professional Market Sentiment for ASX negative
ANALYSIS: With an Obermatt Sentiment Rank of 12 (better than 12% compared with alternatives), overall professional sentiment and engagement for the stock ASX is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for ASX. Analyst Opinions are at a rank of 14 (worse than 86% 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 61, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in ASX. But the Professional Investors rank is low at 33, which means that professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 7, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 12 (less encouraging than 88% compared with investment alternatives), ASX has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: ASX Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 18 (worse than 82% compared with alternatives), ASX shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for ASX. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 60% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning ASX's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 16 which means that the stock price compared with what market professionals expect for future profit levels is higher than 84% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 28 is also low. Compared with invested capital, the stock price is higher than for 72% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 18, is a sell recommendation based on ASX's stock price compared with the company's operational size and dividend yields. Should dividend investors pick ASX? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose ASX only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: ASX Growth Momentum negative
| GROWTH METRICS | September 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 49 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 30 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 32 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 13 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 15 |
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ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), ASX shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for ASX. Sales Growth has a rank of 49, which means that currently professionals expect the company to grow less than 51% of its competitors. The same is valid for Profit Growth, with a rank of 30, and Capital Growth with 32. In addition, Stock Returns have a below market rank of 13, which means that the stock returns have recently been below 87% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: ASX Debt Financing Safety very solid
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 86 |
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| REFINANCING | ||||||||
| REFINANCING | 51 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 74 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
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ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2023, the company ASX has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of ASX 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 ASX. Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 74, which means that the company generates more profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), ASX 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: ASX Below-Average Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| COMBINED | ||||||||
| COMBINED | 29 |
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ANALYSIS: With an Obermatt Combined Rank of 29 (worse than 71% compared with investment alternatives), ASX (Financial Exchanges & Data, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of ASX are low in value (priced high) with a consolidated Value Rank of 18 (worse than 82% of alternatives) and show below-average growth (Growth Rank of 15) but are safely financed (Safety Rank of 92), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 29, is a hold recommendation based on ASX's financial characteristics. As the company ASX's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 18) and low growth (Obermatt Growth Rank of 15), 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 92) 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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