October 19, 2023
Top 10 Stock CECO 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: CECO – Top 10 Stock in Electromobility & Hydrogen
CECO is listed as a top 10 stock on October 19, 2023 in the market index Electromobility because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for CECO on October 19, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Facility Services |
| Index | Electromobility, NASDAQ |
| 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° View CECO Strong Buy
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 79 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock CECO are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for CECO. The consolidated Growth Rank has a good rank of 65, 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 65% of competitors in the same industry. The consolidated Safety Rank at 79 means that the company has a financing structure that is safer than 79% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 46, meaning that the share price of CECO is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 54% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 77, CECO is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 65), a safe financing structure (Safety Rank of 79), and positive professional market sentiment (Sentiment Rank of 63), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of CECO compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (65% better than peers). The value rank could be the reverse reflection of that (35%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the 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 CECO positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock CECO is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for CECO. Analyst Opinions are at a rank of 74 (better than 74% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 78, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 78% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 23, which means that currently, professional investors hold less stock in this company than in 77% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), CECO has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in CECO may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in CECO. ...read more
Value Strategy: CECO Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), CECO 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 CECO. Price-to-Sales (P/S) is 60, which means that the stock price compared with what market professionals expect for future sales is lower than for 60% of comparable companies, indicating a good value concerning CECO's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 57% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 1 (dividends are expected to be higher than for 1% 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 53% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for CECO to 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 46, is a hold recommendation based on CECO'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: CECO Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), CECO 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 CECO. Sales Growth has a rank of 79 which means that currently professionals expect the company to grow more than 79% of its competitors. Stock Returns are also above average with a rank of 91. But Capital Growth has only a rank of 43, which means that currently professionals expect the company to grow its invested capital less than 57% of its competitors. Profit Growth is also low, with a rank of only 23, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 91% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: CECO Debt Financing Safety very solid
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 67 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 79 |
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ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2023, the company CECO has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CECO 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 CECO. Leverage is at 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Refinancing is at a rank of 67, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Finally, Liquidity is also good at a rank of 56, which means that the company generates more profit to service its debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), CECO 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: CECO Top Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), CECO (Facility Services, USA) shares have much better financial characteristics than comparable stocks. Shares of CECO are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 79, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on CECO's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company CECO exhibits low value (Obermatt Value Rank of 46), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 79) 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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