September 28, 2023
Top 10 Stock Emeco 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: Emeco – Top 10 Stock in Australian Securities Exchange Index ASX 300
Emeco is listed as a top 10 stock on September 28, 2023 in the market index ASX 300 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 38 (38% performer), Obermatt assesses an overall hold recommendation for Emeco on September 28, 2023.
Snapshot: Obermatt Ranks
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 Emeco Hold
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 43 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% compared with alternatives), overall professional sentiment and financial characteristics for the stock Emeco are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Emeco. Only the consolidated Value Rank has an attractive rank of 100, which means that the share price of Emeco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 100% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 7, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 37, meaning the company has a riskier financing structure than 63% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 57% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 43. ...read more
RECOMMENDATION: With a consolidated 360° View of 38, Emeco is worse than 62% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 100. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 7), a riskier financing structure than the competition (Safety Rank of 37), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 43) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Emeco is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Emeco. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Emeco only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock Emeco is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Emeco. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 55 which means that currently, professional investors hold more stock in this company than in 55% of alternative investment opportunities. But Analyst Opinions Change has a rank of 21, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Emeco. Furthermore, Market Pulse has a rank of 26, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), Emeco has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Emeco Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Emeco shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Emeco. Price-to-Sales is 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for Emeco's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 100% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 97. Compared with other companies in the same industry, dividend yields of Emeco are expected to be higher than for 94% of all competitors (a Dividend Yield rank of 94). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Emeco's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Emeco based on its detailed value metrics.
Growth Strategy: Emeco Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Emeco 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 all four metrics below average for Emeco. Sales Growth has a rank of 6, which means that currently professionals expect the company to grow less than 94% of its competitors. The same is valid for Profit Growth, with a rank of 37, and Capital Growth with 39. In addition, Stock Returns have a below market rank of 23, which means that the stock returns have recently been below 77% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 7, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Emeco Debt Financing Safety below-average
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 61 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Emeco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Emeco 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 Emeco and the other two below average. Refinancing is at 61, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 35, meaning the company generates less profit to service its debt than 65% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Emeco has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Emeco are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Emeco Below-Average Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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| COMBINED | ||||||||
| COMBINED | 39 |
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ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Emeco (Trading & Distribution, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Emeco are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 7), and are riskily financed (Safety Rank of 37), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Emeco's financial characteristics. As the company Emeco's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 7) and risky financing practices (Obermatt Safety Rank of 37), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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