May 18, 2023
Top 10 Stock Callon 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: Callon – Top 10 Stock in Oil & Gas Mining and Production
Callon is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 13 (13% performer), Obermatt issues an overall sell recommendation for Callon on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Oil & Gas Production |
| Index | Low Emissions, Oil & Gas |
| Size class | 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° Assessment Callon Sell
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 13 |
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ANALYSIS: With an Obermatt 360° View of 13 (better than 13% compared with alternatives), overall professional sentiment and engagement for the stock Callon are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Callon. Only the consolidated Value Rank has an attractive rank of 85, which means that the share price of Callon is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 85% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 7, which means 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. The consolidated Safety Rank has a riskier rank of 19, meaning the company has a riskier financing structure than 81% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 99% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 1. ...read more
RECOMMENDATION: With a 360° View of 13, Callon is worse than 87% of all alternative stock investment opportunities based on the Obermatt Method. This means that Callon shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 85. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 7), a riskier financing structure (Safety Rank of 19), and negative market sentiment in the professional investor community (Sentiment Rank of 1). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Callon is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Callon. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Callon negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock Callon is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Callon. Analyst Opinions are at a rank of 15 (worse than 85% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 11 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 14, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 86% of competitors). No wonder, the Professional Investors rank is only 8, which means that professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to stay away from Callon, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), Callon has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Callon Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 85 (better than 85% compared with alternatives) for 2023, Callon shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Callon. Price-to-Sales (P/S) is 86, which means that the stock price compared with what market professionals expect for future sales is lower than for 86% of comparable companies, indicating a good value regarding Callon's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 97% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 96. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Callon (an Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 85, is a strong buy recommendation based on Callon's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Callon Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Callon 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 three out of four metrics below average for Callon. While Profit Growth has a good rank of 57, as professionals currently expect the company to grow its profits more than 57% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 36, which means that currently professionals expect the company to grow less than 64% of its competitors, while Capital Growth has a rank of 34 and Stock Returns have been below market median, with a rank of 11 (89% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a SELL recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Callon Debt Financing Safety risky
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 26 |
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| REFINANCING | ||||||||
| REFINANCING | 5 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 51 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 19 |
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ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company Callon 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 Callon 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 Callon. Liquidity is at 51, meaning the company generates more profit to service its debt than 51% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 5, 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 95% of its competitors. Leverage is also high at a rank of 26, which means that the company has an above-average debt-to-equity ratio. It has more debt than 74% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 19 (worse than 81% compared with alternatives), Callon 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 usuallyl 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. ...read more
Combined financial peformance: Callon Lowest Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| COMBINED | ||||||||
| COMBINED | 19 |
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ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Callon (Oil & Gas Production, USA) shares have lower financial characteristics compared with similar stocks. Shares of Callon are a good value (attractively priced) with a consolidated Obermatt Value Rank of 85 (better than 85% of alternatives) but show below-average growth (Growth Rank of 7), and are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 19, is a sell recommendation based on Callon's financial characteristics. As the company Callon's key financial metrics exhibit good value (Obermatt Value Rank of 85) but low growth (Obermatt Growth Rank of 7) and risky financing practices (Obermatt Safety Rank of 19), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 85% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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