December 14, 2023
Top 10 Stock Bajaj Auto 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: Bajaj Auto – Top 10 Stock in Bombay Stock Exchange Sensitive Index BSE Sensex
Bajaj Auto is listed as a top 10 stock on December 14, 2023 in the market index BSE Sensex because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Bajaj Auto on December 14, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Motorcycle Manufacturers |
| Index | BSE Sensex, Independent Boards Growth Markets, CNX Nifty 50 |
| 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 Bajaj Auto Strong Buy
| 360 METRICS | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 79 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Bajaj Auto are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Bajaj Auto. The consolidated Value Rank has an attractive rank of 56, which means that the share price of Bajaj Auto 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 56% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 79, 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. The company is also safely financed with a Safety rank of 79. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Bajaj Auto is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 56), above-average growth (Growth Rank of 79), safe financing practices (Safety Rank of 79), and a positive market sentiment in the professional investor community (Sentiment Rank of 86), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Bajaj Auto is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Bajaj Auto very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Bajaj Auto is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Bajaj Auto. Analyst Opinions are at a rank of 56 (better than 56% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 74, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Bajaj Auto. Finally, the Professional Investors rank is 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Bajaj Auto has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 49, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 51% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Bajaj Auto is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Bajaj Auto Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 56 (better than 56% compared with alternatives), Bajaj Auto shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Bajaj Auto. Price-to-Profit (also referred to as price-earnings, P/E) is 59 which means that the stock price compared with what market professionals expect for future profits is lower than for 59% of comparable companies, indicating a good value concerning Bajaj Auto'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 34, which means that the stock price is lower as regards to invested capital than for 34% of comparable investments. On the other hand, Price-to-Sales is less favorable than 66% of alternatives (only 34% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 14% 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 56, is a buy recommendation based on Bajaj Auto's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Bajaj Auto Growth Momentum high
| GROWTH METRICS | December 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 67 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 54 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 53 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 89 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 79 |
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ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2023, Bajaj Auto 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 four indicators above average for Bajaj Auto. Sales Growth has a value of 67, which means that, currently, professionals expect the company to grow more than 67% of its competitors. The same is valid for Profit Growth with a value of 54 and for Capital Growth with 53. In addition, Stock Returns had an above-average rank value of 89, which means they have been higher than 89% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Bajaj Auto exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Bajaj Auto Debt Financing Safety very solid
| SAFETY METRICS | December 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 29 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 85 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 79 |
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ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2023, the company Bajaj Auto has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Bajaj Auto 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, with two out of three indicators above average for Bajaj Auto. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 85, meaning the company generates more profit to service its debt than 85% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 29, 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 71% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), Bajaj Auto has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Bajaj Auto. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Bajaj Auto Top Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 85 |
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| COMBINED | ||||||||
| COMBINED | 94 |
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ANALYSIS: With an Obermatt Combined Rank of 94 (better than 94% compared with investment alternatives), Bajaj Auto (Motorcycle Manufacturers, India) shares have much better financial characteristics than comparable stocks. Shares of Bajaj Auto are a good value (attractively priced) with a consolidated Value Rank of 56 (better than 56% of alternatives), show above-average growth (Growth Rank of 79), and are safely financed (Safety Rank of 79), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 94, is a strong buy recommendation based on Bajaj Auto's financial characteristics. As the company Bajaj Auto's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 56), above-average growth (Obermatt Growth Rank of 79), and indicate that the company is safely financed (Obermatt Safety Rank of 79), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Bajaj Auto. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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