December 7, 2023
Top 10 Stock Cincinnati Financial 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: Cincinnati Financial – Top 10 Stock in Dow Jones U.S. Insurance Index
Cincinnati Financial is listed as a top 10 stock on December 07, 2023 in the market index D.J. US Insurance 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 1 (1% performer), Obermatt issues an overall sell recommendation for Cincinnati Financial on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | Employee Focus US, NASDAQ, D.J. US Insurance, S&P 500 |
| 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 Cincinnati Financial Sell
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| SENTIMENT | ||||||||
| SENTIMENT | 74 |
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| 360° VIEW | ||||||||
| 360° VIEW | 1 |
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ANALYSIS: With an Obermatt 360° View of 1 (better than 1% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cincinnati Financial are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Cincinnati Financial. 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 Safety Rank at 56 means that the company has a financing structure that is safer than 56% 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 74, which means that professional investors are more optimistic about the stock than for 74% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 36, meaning that the share price of Cincinnati Financial is on the higher side compared with 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. ...read more
RECOMMENDATION: With a consolidated 360° View of 1, Cincinnati Financial is worse than 99% of all alternative stock investment opportunities based on the Obermatt Method. This means that Cincinnati Financial shares are on the riskier side for investors. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 79), a safe financing structure (Safety Rank of 56), and positive professional market sentiment (Sentiment Rank of 74), 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 Cincinnati Financial compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (79% better than peers). The value rank could be the reverse reflection of that (21%). 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 Cincinnati Financial positive
ANALYSIS: With an Obermatt Sentiment Rank of 74 (better than 74% compared with alternatives), overall professional sentiment and engagement for the stock Cincinnati Financial is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cincinnati Financial. Analyst Opinions are at a rank of 55 (better than 55% 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 88, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Cincinnati Financial. Finally, the Professional Investors rank is 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 74 (more positive than 74% compared with investment alternatives), Cincinnati Financial has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 39, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 61% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Cincinnati Financial is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Cincinnati Financial Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% compared with alternatives), Cincinnati Financial 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 Cincinnati Financial. Expected dividend yields are higher than for 68% of comparable companies (a Dividend Yield rank of 68), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than for 75% of comparable companies, indicating a low value concerning Cincinnati Financial's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Cincinnati Financial with a rank of 25. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 75% of comparable companies, indicating a low value concerning Cincinnati Financial's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a hold recommendation based on Cincinnati Financial's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Cincinnati Financial may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Cincinnati Financial Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2022, Cincinnati Financial 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 Cincinnati Financial. Sales Growth has a value of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Profit Growth with a value of 74 and Capital Growth with a rank of 97 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 27, which means that stock returns have recently been below 73% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, is a buy recommendation for growth and momentum investors. Cincinnati Financial has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Cincinnati Financial, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Cincinnati Financial Debt Financing Safety above-average
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 93 |
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| REFINANCING | ||||||||
| REFINANCING | 27 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 56 |
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ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Cincinnati Financial has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Cincinnati Financial 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, with just one indicator above average for Cincinnati Financial and the other two below average. Leverage is at a rank of 93 meaning the company has a below-average debt-to-equity ratio. It has less debt than 93% of its competitors.Refinancing is at a rank of 27, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 73% of its competitors. Liquidity is at a rank of 6, meaning that the company generates less profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 56 (better than 56% compared with alternatives), Cincinnati Financial has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Cincinnati Financial are on the safer side. ...read more
Combined financial peformance: Cincinnati Financial Lowest Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 16 |
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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Cincinnati Financial (Property & Casualty Insurance, USA) shares have lower financial characteristics compared with similar stocks. Shares of Cincinnati Financial are low in value (priced high) with a consolidated Value Rank of 36 (worse than 64% of alternatives). But they show above-average growth (Growth Rank of 79) and are safely financed (Safety Rank of 56, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Cincinnati Financial's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cincinnati Financial exhibits low value (Obermatt Value Rank of 36), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 79). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 56) 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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