May 11, 2023
Top 10 Stock Capstone Copper 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: Capstone Copper – Top 10 Stock in Silver Mining and Production
Capstone Copper is listed as a top 10 stock on May 11, 2023 in the market index Silver 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° Rank of 60 (high 60% performer), Obermatt assesses an overall buy recommendation for Capstone Copper on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Copper |
| Index | Copper, Iron, Lithium, Rare Earth, Silver, Uranium, TSX Composite |
| Size class | Medium |
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 Capstone Copper Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 60 |
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ANALYSIS: With an Obermatt 360° Rank of 60 (better than 60% compared with alternatives), overall professional sentiment and engagement for the stock Capstone Copper are above average. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Capstone Copper. 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. This means that growth is higher than for 79% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 36, which means that the share price of Capstone Copper 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 64% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 36, which means that the company has a financing structure that is riskier than 64% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° Rank of 60, Capstone Copper is better than 60% 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 79), and professional market sentiment is positive (Sentiment Rank of 59), but value and safety are below average. The Safety Rank is the least important 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 one minus the growth rank, that is the minimum level that the value rank should have. 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 (even though it is lower than 50). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Capstone Copper positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Capstone Copper is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Capstone Copper. Analyst Opinions are at a rank of 100 (better than 100% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 74, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 74% of competitors). But Analyst Opinions Change is negative with a rank of 27, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Capstone Copper. There are also only so many institutional investors holding company stock with a Professional Investors rank of 42, which means that, currently, professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), Capstone Copper has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Capstone Copper Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% compared with alternatives), Capstone Copper shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Capstone Copper. Price-to-Profit (also referred to as price-earnings, P/E) has a value of 61 which means that the stock price compared with what market professionals expect for future profits is lower than 61% of comparable companies, indicating a good value concerning Capstone Copper's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with the Obermatt Price-to-Book Rank of 61, which means that the stock price is lower compared with invested capital than for 61% of comparable investments. On the other hand, Price-to-Sales is less favorable than 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a HOLD recommendation based on Capstone Copper'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 concerning expected revenues, 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 distribute it to shareholders in dividends, sealing the company's fate early. This needs to be investigated, and the company's optimism verified before making a stock purchasing decision. ...read more
Growth Strategy: Capstone Copper Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2023, Capstone Copper 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 Capstone Copper. Sales Growth has a rank of 90 which means that currently, professionals expect the company to grow more than 90% of its competitors. Both Profit Growth, with a rank of 60, and Stock Returns, with a rank of 67, are also above average. But Capital Growth only has a rank of 30, which means that, currently, professionals expect the company to grow its invested capital less than 40% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, 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: Capstone Copper Debt Financing Safety below-average
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 58 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 36 |
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ANALYSIS: With an Obermatt Safety Rank of 36 (better than 36% compared with alternatives), the company Capstone Copper 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 Capstone Copper 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 two out of three indicators above average for Capstone Copper. Leverage is at a rank of 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Liquidity is also good at a rank of 58, meaning the company generates more profit to service its debt than 58% 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 25, 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 75% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 36 (worse than 64% compared with alternatives), Capstone Copper has a financing structure that is riskier 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 Capstone Copper. 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: Capstone Copper Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| COMBINED | ||||||||
| COMBINED | 41 |
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ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Capstone Copper (Copper, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Capstone Copper are low in value (priced high) with a consolidated Obermatt Value Rank of 36 (worse than 64% of alternatives), and are riskily financed (Safety Rank of 36, which means above-average debt burdens) but show above-average growth (Growth Rank of 79). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 41, is a hold recommendation based on Capstone Copper's financial characteristics. As the company Capstone Copper shows low value with an Obermatt Value Rank of 36 (64% 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 79% of comparable companies (Obermatt Growth Rank is 79). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 36 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 Capstone Copper, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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