Fact based stock research
Babcock (LSE:BAB)
GB0009697037
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.
Babcock stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Babcock (Aerospace & Defense, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Babcock are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 4, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Babcock's financial characteristics. As the company Babcock shows low value with an Obermatt Value Rank of 19 (81% 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 55% of comparable companies (Obermatt Growth Rank is 55). 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 4 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 Babcock, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | United Kingdom |
| Industry | Aerospace & Defense |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Dividends Europe |
| Size class | X-Large |
This stock has achievements: Gold Winner CEO.
25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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.
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: Babcock
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 28 |
|
76 |
|
13 |
|
19 |
|
| GROWTH | ||||||||
| GROWTH | 31 |
|
11 |
|
57 |
|
55 |
|
| SAFETY | ||||||||
| SAFETY | 13 |
|
1 |
|
3 |
|
4 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
31 |
|
43 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
4 |
|
5 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Babcock (Aerospace & Defense, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Babcock are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 4, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Babcock's financial characteristics. As the company Babcock shows low value with an Obermatt Value Rank of 19 (81% 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 55% of comparable companies (Obermatt Growth Rank is 55). 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 4 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 Babcock, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 28 |
|
76 |
|
13 |
|
19 |
|
| GROWTH | ||||||||
| GROWTH | 31 |
|
11 |
|
57 |
|
55 |
|
| SAFETY | ||||||||
| SAFETY | 13 |
|
1 |
|
3 |
|
4 |
|
| COMBINED | ||||||||
| COMBINED | 6 |
|
8 |
|
3 |
|
4 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Babcock shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Babcock. Price-to-Sales (P/S) is 63, which means that the stock price compared with what market professionals expect for future sales is lower than 63% of comparable companies, indicating a good value concerning to Babcock's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 30, meaning that dividends are expected to be lower than for 70% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 85% of alternatives (only 15% 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 99% 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 19, is a sell recommendation based on Babcock'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 Babcock 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, Babcock 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) | 89 |
|
83 |
|
72 |
|
63 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 28 |
|
84 |
|
3 |
|
1 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 15 |
|
20 |
|
10 |
|
15 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
88 |
|
33 |
|
30 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 28 |
|
76 |
|
13 |
|
19 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Babcock shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Babcock. Profit Growth has a rank of 98, which means that currently professionals expect the company to grow its profits more than 98% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has a below the median rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors, and Capital Growth also has a lower rank of 24. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy 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 Babcock. 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 | 15 |
|
10 |
|
14 |
|
12 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 59 |
|
13 |
|
94 |
|
98 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
8 |
|
44 |
|
24 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 90 |
|
97 |
|
73 |
|
91 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 31 |
|
11 |
|
57 |
|
55 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company Babcock has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Babcock 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 Babcock. 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 6, 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 94% of its competitors. Leverage is also high at a rank of 7, which means that the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% compared with alternatives), Babcock has a financing structure that is significantly 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. 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 | 10 |
|
3 |
|
7 |
|
7 |
|
| REFINANCING | ||||||||
| REFINANCING | 20 |
|
5 |
|
9 |
|
6 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
|
12 |
|
39 |
|
60 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 13 |
|
1 |
|
3 |
|
4 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
26 |
|
64 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
63 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
68 |
|
22 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
22 |
|
52 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
31 |
|
43 |
|
new |
|
Stock analysis by the purely fact based Obermatt Method for Babcock from April 25, 2024.
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