November 23, 2023
Top 10 Stock Cascades 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: Cascades – Top 10 Stock in Energy Efficency Leaders
Cascades is listed as a top 10 stock on November 23, 2023 in the market index Energy Efficient because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Cascades on November 23, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Paper Packaging |
| Index | Energy Efficient, TSX Composite |
| 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 Cascades Strong Buy
| 360 METRICS | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 77 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| SENTIMENT | ||||||||
| SENTIMENT | 84 |
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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 Cascades are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Cascades. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Cascades 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 100% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 77, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 84. But the company’s financing is risky with a Safety rank of 42. This means 58% of comparable companies have a safer financing structure than Cascades. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Cascades is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 100), above-average growth (Growth Rank of 77), and positive market sentiment in the professional investor community (Sentiment Rank of 84), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 42), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Cascades is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Cascades very positive
ANALYSIS: With an Obermatt Sentiment Rank of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Cascades is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cascades. Analyst Opinions are at a rank of 22 (worse than 78% 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 94, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Cascades. Even better, the Professional Investors rank is 63, meaning that professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 72, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 72% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% compared with investment alternatives), Cascades has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Cascades Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Cascades shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Cascades. Price-to-Sales is 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for Cascades's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 78% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 93. Compared with other companies in the same industry, dividend yields of Cascades are expected to be higher than for 90% of all competitors (a Dividend Yield rank of 90). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Cascades's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Cascades based on its detailed value metrics.
Growth Strategy: Cascades Growth Momentum high
| GROWTH METRICS | November 23, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 37 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 6 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 95 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 77 |
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ANALYSIS: With an Obermatt Growth Rank of 77 (better than 77% compared with alternatives) for 2023, Cascades 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 half of the indicators below and half above average for Cascades. Profit Growth has a rank of 100, which means that currently professionals expect the company to grow its profits more than 100% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 95 (above 95% of alternative investments). But Sales Growth has a below the median rank of 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors, and Capital Growth also has a lower rank of 6. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 77, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Cascades. ...read more
Safety Strategy: Cascades Debt Financing Safety below-average
| SAFETY METRICS | November 23, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 35 |
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| REFINANCING | ||||||||
| REFINANCING | 74 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 17 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 42 |
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ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company Cascades 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 Cascades 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 Cascades and the other two below average. Refinancing is at 74, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 74% of its competitors. But Leverage is high with a rank of 35, meaning the company has an above-average debt-to-equity ratio. It has more debt than 65% of its competitors. Liquidity is also on the riskier side with a rank of 17, meaning the company generates less profit to service its debt than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), Cascades has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Cascades are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Cascades Top Financial Performance
| COMBINED PERFORMANCE | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 77 |
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| SAFETY | ||||||||
| SAFETY | 17 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), Cascades (Paper Packaging, Canada) shares have much better financial characteristics than comparable stocks. Shares of Cascades are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), show above-average growth (Growth Rank of 77) but are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on Cascades's financial characteristics. As the company Cascades's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 100) and above-average growth (Obermatt Growth Rank of 77), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 42) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. 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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