December 14, 2023
Top 10 Stock East West Bancorp 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: East West Bancorp – Top 10 Stock in Dow Jones U.S. Regional Banks Index
East West Bancorp is listed as a top 10 stock on December 14, 2023 in the market index D.J. US Banks 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 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for East West Bancorp on December 14, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | NASDAQ, D.J. US Banks, S&P MIDCAP |
| Size class | XX-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 East West Bancorp Strong Buy
| 360 METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 84 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 96 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 86 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 96 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock East West Bancorp are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for East West Bancorp. The consolidated Growth Rank has a good rank of 84, 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 84% of competitors in the same industry. The consolidated Safety Rank at 96 means that the company has a financing structure that is safer than 96% 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 86, which means that professional investors are more optimistic about the stock than for 86% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 20, meaning that the share price of East West Bancorp is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 80% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, East West Bancorp is better positioned than 96% 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 84), a safe financing structure (Safety Rank of 96), and positive professional market sentiment (Sentiment Rank of 86), 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 East West Bancorp compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (84% better than peers). The value rank could be the reverse reflection of that (16%). 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 East West Bancorp very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock East West Bancorp is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for East West Bancorp. Analyst Opinions are at a rank of 100 (better than 100% 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 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 East West Bancorp. Finally, the Professional Investors rank is 73, which means that currently, professional investors hold more stock in this company than in 73% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), East West Bancorp has a reputation among professional investors that is significantly higher than 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 45, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 55% of competitors). This could mean future risks and should make investors careful. Attention to negative news for East West Bancorp 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: East West Bancorp Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), East West Bancorp shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for East West Bancorp. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 82, which means that the stock price compared with what market professionals expect for future profits is lower than for 82% of comparable companies, indicating a good value concerning East West Bancorp's profit levels. But Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than for 89% of comparable companies, indicating a low value concerning East West Bancorp's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7 and for dividend yield, which is lower than for 65% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on East West Bancorp's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then East West Bancorp is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: East West Bancorp Growth Momentum high
| GROWTH METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 41 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 82 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 57 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 84 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 84 (better than 84% compared with alternatives) for 2023, East West Bancorp 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 East West Bancorp. Profit Growth has a rank of 82 which means that currently professionals expect the company to grow its profits more than 82% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 57, and Stock Returns has a rank of 93 which means that the stock returns have recently been above 93% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 41 (59% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 84, 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: East West Bancorp Debt Financing Safety very solid
| SAFETY METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 81 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 37 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company East West Bancorp has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of East West Bancorp 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 East West Bancorp. Leverage is at a rank of 81, meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors. Liquidity is also good at a rank of 94, meaning the company generates more profit to service its debt than 94% 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 a consolidated Safety Rank of 96 (better than 96% compared with alternatives), East West Bancorp 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 East West Bancorp. 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
Combined financial peformance: East West Bancorp Top Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 84 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 88 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), East West Bancorp (Regional Banks, USA) shares have much better financial characteristics than comparable stocks. Shares of East West Bancorp are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives). But they show above-average growth (Growth Rank of 84) and are safely financed (Safety Rank of 96, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on East West Bancorp's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company East West Bancorp exhibits low value (Obermatt Value Rank of 20), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 84). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 96) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.