October 26, 2023
Top 10 Stock Cholamandalam Investment and Finance 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: Cholamandalam Investment and Finance – Top 10 Stock in Good Governance in Growth Markets
Cholamandalam Investment and Finance is listed as a top 10 stock on October 26, 2023 in the market index Good Governace Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 12 (12% performer), Obermatt issues an overall sell recommendation for Cholamandalam Investment and Finance on October 26, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Consumer Finance |
| Index | Good Governace Growth Markets |
| 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° View Cholamandalam Investment and Finance Sell
| 360 METRICS | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| SENTIMENT | ||||||||
| SENTIMENT | 22 |
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| 360° VIEW | ||||||||
| 360° VIEW | 12 |
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ANALYSIS: With an Obermatt 360° View of 12 (better than 12% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cholamandalam Investment and Finance are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Cholamandalam Investment and Finance. The consolidated Growth Rank has a good rank of 100, 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. It ranks higher than 100% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 15 means that the share price of Cholamandalam Investment and Finance is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 85% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 1, which means that the company has a riskier financing structure than 99% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 22, indicating professional investors are more pessimistic about the stock than for 78% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 12, Cholamandalam Investment and Finance is worse than 88% of all alternative stock investment opportunities based on the Obermatt Method. This means that Cholamandalam Investment and Finance shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 100), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 22), the company is rather risky when it comes to financing (Safety Rank of 1). The negative market view on Cholamandalam Investment and Finance 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 join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Cholamandalam Investment and Finance compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one 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 (even though it is lower than 50). As market sentiment is critical, 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 Cholamandalam Investment and Finance negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock Cholamandalam Investment and Finance is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Cholamandalam Investment and Finance. Analyst Opinions are at a rank of 36 (worse than 64% 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 52 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Cholamandalam Investment and Finance. Market Pulse is also positive with a rank of 52, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 52% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 19, which means that professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), Cholamandalam Investment and Finance has a reputation among professional investors that is far below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Cholamandalam Investment and Finance Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Cholamandalam Investment and Finance shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Cholamandalam Investment and Finance. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Cholamandalam Investment and Finance's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 16, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Cholamandalam Investment and Finance. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 11 and Dividend Yield, which is lower than 84% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a sell recommendation based on Cholamandalam Investment and Finance's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Cholamandalam Investment and Finance? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Cholamandalam Investment and Finance? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Cholamandalam Investment and Finance may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Cholamandalam Investment and Finance Growth Momentum high
| GROWTH METRICS | October 26, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 94 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 77 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 77 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 89 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
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ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2023, Cholamandalam Investment and Finance 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 four indicators above average for Cholamandalam Investment and Finance. Sales Growth has a value of 94, which means that, currently, professionals expect the company to grow more than 94% of its competitors. The same is valid for Profit Growth with a value of 77 and for Capital Growth with 77. In addition, Stock Returns had an above-average rank value of 89, which means they have been higher than 89% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Cholamandalam Investment and Finance exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Cholamandalam Investment and Finance Debt Financing Safety risky
| SAFETY METRICS | October 26, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 4 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 1 |
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ANALYSIS: With an Obermatt Safety Rank of 1 (better than 1% compared with alternatives), the company Cholamandalam Investment and Finance 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 Cholamandalam Investment and Finance 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 all three metrics below average for Cholamandalam Investment and Finance. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 4, meaning the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. Finally, Refinancing is at a rank of 39 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 1 (worse than 99% compared with alternatives), Cholamandalam Investment and Finance has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: Cholamandalam Investment and Finance Lowest Financial Performance
| COMBINED PERFORMANCE | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Cholamandalam Investment and Finance (Consumer Finance, India) shares have lower financial characteristics compared with similar stocks. Shares of Cholamandalam Investment and Finance are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives), and are riskily financed (Safety Rank of 1, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Cholamandalam Investment and Finance's financial characteristics. As the company Cholamandalam Investment and Finance shows low value with an Obermatt Value Rank of 15 (85% 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 100% of comparable companies (Obermatt Growth Rank is 100). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 1 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 Cholamandalam Investment and Finance, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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