December 7, 2023
Top 10 Stock BDO Unibank 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: BDO Unibank – Top 10 Stock in Independent Boards in Growth Markets
BDO Unibank is listed as a top 10 stock on December 07, 2023 in the market index Independent Boards Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for BDO Unibank on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | Philippines |
| Industry | Diversified Banks |
| Index | Good Governace Growth Markets, Independent Boards Growth Markets |
| Size class | XX-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 BDO Unibank Strong Buy
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 33 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 95 |
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| 360° VIEW | ||||||||
| 360° VIEW | 80 |
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ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock BDO Unibank are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for BDO Unibank. The consolidated Growth Rank has a good rank of 85, 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. This means that growth is higher than for 85% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 95, which means that professional investors are more optimistic about the stock than for 95% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 33, which means that the share price of BDO Unibank is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 67% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 39, which means that the company has a financing structure that is riskier than those of 61% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 80, BDO Unibank is better positioned than 80% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 85), and professional market sentiment is positive (Sentiment Rank of 95), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for BDO Unibank very positive
ANALYSIS: With an Obermatt Sentiment Rank of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock BDO Unibank is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for BDO Unibank. Analyst Opinions are at a rank of 67 (better than 67% 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 54, 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 BDO Unibank. The Professional Investors rank is 80, which means that currently, professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 90 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 90% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 95 (more positive than 95% compared with investment alternatives), BDO Unibank 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 BDO Unibank 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
Value Strategy: BDO Unibank Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), BDO Unibank shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for BDO Unibank. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value concerning BDO Unibank's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 50% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 25 (dividends are expected to be higher than for 25% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 59% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for BDO Unibank to 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on BDO Unibank's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: BDO Unibank Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2023, BDO Unibank 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 BDO Unibank. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 78, and Stock Returns, with a rank of 89, are also above average. But Capital Growth only has a rank of 47, which means that, currently, professionals expect the company to grow its invested capital less than 53% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: BDO Unibank Debt Financing Safety below-average
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 90 |
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| REFINANCING | ||||||||
| REFINANCING | 10 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% compared with alternatives), the company BDO Unibank 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 BDO Unibank 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 BDO Unibank and the other two below average. Leverage is at a rank of 90 meaning the company has a below-average debt-to-equity ratio. It has less debt than 90% of its competitors.Refinancing is at a rank of 10, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. Liquidity is at a rank of 41, meaning that the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% compared with alternatives), BDO Unibank has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of BDO Unibank are on the safer side. ...read more
Combined financial peformance: BDO Unibank Above-Average Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 33 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 59 |
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ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), BDO Unibank (Diversified Banks, Philippines) shares have above-average financial characteristics compared with similar stocks. Shares of BDO Unibank are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), and are riskily financed (Safety Rank of 39, which means above-average debt burdens) but show above-average growth (Growth Rank of 85). ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on BDO Unibank's financial characteristics. As the company BDO Unibank shows low value with an Obermatt Value Rank of 33 (67% 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 85% of comparable companies (Obermatt Growth Rank is 85). 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 39 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 BDO Unibank, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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