November 2, 2023
Top 10 Stock CTT - Correios Hold 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: CTT - Correios – Top 10 Stock in PSI-20 Index
CTT - Correios is listed as a top 10 stock on November 02, 2023 in the market index PSI 20 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 28 (28% performer), Obermatt assesses an overall hold recommendation for CTT - Correios on November 02, 2023.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Air Freight & Logistics |
| Index | Renewables Users, Sound Pay Europe, PSI General, PSI 20 |
| 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 CTT - Correios Hold
| 360 METRICS | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock CTT - Correios are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for CTT - Correios. The consolidated Growth Rank has a good rank of 87, 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 87% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 28 means that the share price of CTT - Correios is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 72% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 23, which means that the company has a riskier financing structure than 77% 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 30, indicating professional investors are more pessimistic about the stock than for 70% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, CTT - Correios is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 87), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 30), the company is rather risky when it comes to financing (Safety Rank of 23). The negative market view on CTT - Correios 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 CTT - Correios 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 CTT - Correios only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock CTT - Correios is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for CTT - Correios. Analyst Opinions are at a rank of 40 (worse than 60% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 18, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 29, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 71% of competitors). On the upside, the Professional Investors rank is 73, which means that professional investors hold more stock in this company than in 73% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), CTT - Correios has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make CTT - Correios stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: CTT - Correios Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), CTT - Correios 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 above average for CTT - Correios. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning CTT - Correios's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 51, which means that dividends are expected to be higher than for 51% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 75% of alternatives (only 25% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 75% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 28, is a hold recommendation based on CTT - Correios's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: CTT - Correios Growth Momentum high
| GROWTH METRICS | November 2, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 25 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 66 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 100 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 73 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 87 |
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ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2023, CTT - Correios 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 CTT - Correios. Profit Growth has a rank of 66 which means that currently professionals expect the company to grow its profits more than 66% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 100, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 25 (75% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: CTT - Correios Debt Financing Safety risky
| SAFETY METRICS | November 2, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 3 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
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ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company CTT - Correios 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 CTT - Correios 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 CTT - Correios. Liquidity is at 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 3, 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 97% of its competitors. Leverage is also high at a rank of 6, which means that the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), CTT - Correios has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: CTT - Correios Below-Average Financial Performance
| COMBINED PERFORMANCE | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| COMBINED | ||||||||
| COMBINED | 40 |
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ANALYSIS: With an Obermatt Combined Rank of 40 (worse than 60% compared with investment alternatives), CTT - Correios (Air Freight & Logistics, Portugal) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CTT - Correios are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives), and are riskily financed (Safety Rank of 23, which means above-average debt burdens) but show above-average growth (Growth Rank of 87). ...read more
RECOMMENDATION: A Combined Rank of 40, is a hold recommendation based on CTT - Correios's financial characteristics. As the company CTT - Correios shows low value with an Obermatt Value Rank of 28 (72% 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 87% of comparable companies (Obermatt Growth Rank is 87). 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 23 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 CTT - Correios, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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