June 15, 2023
Top 10 Stock Berkeley Group Hold 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: Berkeley Group – Top 10 Stock in FTSE 350 Index
Berkeley Group is listed as a top 10 stock on June 15, 2023 in the market index FTSE 350 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 46 (46% performer), Obermatt assesses an overall hold recommendation for Berkeley Group on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Homebuilding |
| Index | FTSE All Shares, FTSE 100, FTSE 350 |
| 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 Berkeley Group Hold
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| SENTIMENT | ||||||||
| SENTIMENT | 12 |
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| 360° VIEW | ||||||||
| 360° VIEW | 46 |
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ANALYSIS: With an Obermatt 360° View of 46 (better than 46% compared with alternatives), overall professional sentiment and financial characteristics for the stock Berkeley Group are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Berkeley Group. The consolidated Growth Rank has a good rank of 73, 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 73% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 82 which means that the company has a financing structure that is safer than 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 32 which means that the share price of Berkeley Group is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 68% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 12, which means that professional investors are more pessimistic about the stock than for 88% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 46, Berkeley Group is worse than 54% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 73), and the company is safely financed (Safety Rank of 82). However, professional market sentiment is low(Sentiment Rank of 12). The negative market view on Berkeley Group may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Berkeley Group compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Berkeley Group negative
ANALYSIS: With an Obermatt Sentiment Rank of 12 (better than 12% compared with alternatives), overall professional sentiment and engagement for the stock Berkeley Group is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Berkeley Group. Analyst Opinions are at a rank of 29 (worse than 71% 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 50, 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 Berkeley Group. But the Professional Investors rank is low at 16, which means that professional investors hold less stock in this company than in 84% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 15, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 85% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 12 (less encouraging than 88% compared with investment alternatives), Berkeley Group 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: Berkeley Group Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Berkeley Group 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 Berkeley Group. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 64% 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 19 which means that the stock price compared with what market professionals expect for future profits is higher than 81% of comparable companies, indicating a low value concerning Berkeley Group's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 45 which means that the stock price compared with what market professionals expect for future profit levels is higher than 55% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 47 is also low. Compared with invested capital, the stock price is higher than for 53% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a HOLD recommendation based on Berkeley Group's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Berkeley Group? 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 Berkeley Group only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Berkeley Group Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Berkeley Group 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 Berkeley Group. Capital Growth has a rank of 94, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has only a rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors, and Profit Growth is also low at a rank of 48. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a BUY 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 Berkeley Group, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Berkeley Group Debt Financing Safety very solid
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 69 |
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| REFINANCING | ||||||||
| REFINANCING | 76 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 73 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
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ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2023, the company Berkeley Group has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Berkeley Group 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 Berkeley Group. Leverage is at 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors. Refinancing is at a rank of 76, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 76% of its competitors. Finally, Liquidity is also good at a rank of 73, which means that the company generates more profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives), Berkeley Group 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: Berkeley Group Top Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Berkeley Group (Homebuilding, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Berkeley Group are low in value (priced high) with a consolidated Obermatt Value Rank of 32 (worse than 68% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 82, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 88, is a strong buy recommendation based on Berkeley Group's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Berkeley Group exhibits low value (Obermatt Value Rank of 32), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 82) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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