June 1, 2023
Top 10 Stock CSR Limited Buy Recommendation

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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 CSR Limited Buy

360 METRICS	June 1, 2023
VALUE
VALUE	47
GROWTH
GROWTH	7
SAFETY
SAFETY	89
SENTIMENT
SENTIMENT	71
360° VIEW
360° VIEW	61

ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock CSR Limited are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for CSR Limited. The consolidated Sentiment Rank has a good rank of 71, which means that professional investors are more optimistic about the stock than for 71% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 89 or better than 89% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 47, meaning that the share price of CSR Limited is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 7. ...read more

RECOMMENDATION: With a 360° View of 61, CSR Limited is better than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 71) and safe financing practices (Safety Rank of 89), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of CSR Limiteḍ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for CSR Limited positive

SENTIMENT METRICS	June 1, 2023
ANALYST OPINION
ANALYST OPINION	30
OPINIONS CHANGE
OPINIONS CHANGE	62
PRO HOLDINGS
PRO HOLDINGS	47
MARKET PULSE
MARKET PULSE	82
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	71

ANALYSIS: With an Obermatt Sentiment Rank of 71 (better than 71% compared with alternatives), overall professional sentiment and engagement for the stock CSR Limited is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for CSR Limited. Analyst Opinions are at a rank of 30 (worse than 70% 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 62 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 CSR Limited. Market Pulse is also positive with a rank of 82, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 82% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 47, which means that professional investors hold less stock in this company than in 53% 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 an Obermatt Sentiment Rank of 71 (more positive than 71% compared with investment alternatives), CSR Limited has a reputation among professional investors that is above-average compared with 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 is getting less expensive for what they are. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more

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Value Strategy: CSR Limited Stock Price Value below-average critical

VALUE METRICS	June 1, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	40
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	12
DIVIDEND YIELD
DIVIDEND YIELD	94
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	47

ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), CSR Limited shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for CSR Limited. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 94% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 45 which means that the stock price compared with what market professionals expect for future profits is higher than 55% of comparable companies, indicating a low value concerning CSR Limited's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 40 which means that the stock price compared with what market professionals expect for future profit levels is higher than 60% of comparable companies. In addition, Price-to-Book Capital (also referred to as market-to-book ratio) with an Price-to-Book Rank of 12 is also low. Compared with invested capital, the stock price is higher than for 88% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a HOLD recommendation based on CSR Limited's stock price compared with the company's operational size and dividend yields. Should dividend investors pick CSR Limited? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose CSR Limited only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: CSR Limited Growth Momentum negative

GROWTH METRICS	June 1, 2023
REVENUE GROWTH
REVENUE GROWTH	16
PROFIT GROWTH
PROFIT GROWTH	29
CAPITAL GROWTH
CAPITAL GROWTH	19
STOCK RETURNS
STOCK RETURNS	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	7

ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), CSR Limited shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for CSR Limited. Sales Growth has a below market rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors. The same is valid for Capital Growth, with a rank of 19, and Profit Growth, with a rank of 29. Currently, professionals expect the company to grow its profits less than 71% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 57, which means that the stock returns have recently been above 57% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for CSR Limited, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more

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Safety Strategy: CSR Limited Debt Financing Safety very solid

SAFETY METRICS	June 1, 2023
LEVERAGE
LEVERAGE	86
REFINANCING
REFINANCING	37
LIQUIDITY
LIQUIDITY	76
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	89

ANALYSIS: With an Obermatt Safety Rank of 89 (better than 89% compared with alternatives) for 2023, the company CSR Limited has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CSR Limited 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 two out of three indicators above average for CSR Limited. Leverage is at a rank of 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors. Liquidity is also good at a rank of 76, meaning the company generates more profit to service its debt than 76% 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 37, 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 63% of its competitors. ...read more

RECOMMENDATION: With an Obermatt Safety Rank of 89 (better than 89% compared with alternatives), CSR Limited has a financing structure that is significantly safer 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 CSR Limited. 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

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Combined financial peformance: CSR Limited Below-Average Financial Performance

COMBINED PERFORMANCE	June 1, 2023
VALUE
VALUE	47
GROWTH
GROWTH	7
SAFETY
SAFETY	76
COMBINED
COMBINED	47

ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% compared with investment alternatives), CSR Limited (Construction Materials, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CSR Limited are low in value (priced high) with a consolidated Obermatt Value Rank of 47 (worse than 53% of alternatives) and show below-average growth (Growth Rank of 7) but are safely financed (Safety Rank of 89), which means low debt burdens. ...read more

RECOMMENDATION: An Obermatt Combined Rank of 47, is a hold recommendation based on CSR Limited's financial characteristics. As the company CSR Limited's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 47) and low growth (Obermatt Growth Rank of 7), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 89) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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