May 18, 2023
Top 10 Stock Ovinitiv 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: Ovinitiv – Top 10 Stock in Oil & Gas Mining and Production
Ovinitiv is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas 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 29 (29% performer), Obermatt assesses an overall hold recommendation for Ovinitiv on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Oil & Gas Production |
| Index | Low Emissions, Diversity USA, Human Rights, Oil & Gas |
| 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° Assessment Ovinitiv Hold
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| SENTIMENT | ||||||||
| SENTIMENT | 31 |
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| 360° VIEW | ||||||||
| 360° VIEW | 29 |
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ANALYSIS: With an Obermatt 360° View of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock Ovinitiv are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Ovinitiv. Only the consolidated Value Rank has an attractive rank of 100, which means that the share price of Ovinitiv is on the lower side compared with 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 19, 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 27, meaning the company has a riskier financing structure than 73% 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 69% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 31. ...read more
RECOMMENDATION: With a 360° View of 29, Ovinitiv is worse than 71% 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 19), a riskier financing structure (Safety Rank of 27), and negative market sentiment in the professional investor community (Sentiment Rank of 31). 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 Ovinitiv 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 Ovinitiv. Only invest if you have solid reasons to believe that the sluggish 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 Ovinitiv only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 31 (better than 31% compared with alternatives), overall professional sentiment and engagement for the stock Ovinitiv is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Ovinitiv. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 41, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Ovinitiv. The Professional Investors rank is also low at 18, meaning that professional investors hold less stock in this company than in 82% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 48, which means that the current professional news and professional social networks are critical of this company (more negative news than for 52% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 31 (less encouraging than 69% compared with investment alternatives), Ovinitiv has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Ovinitiv Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Ovinitiv shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Ovinitiv. Price-to-Sales has a value of 90 which means that the stock price compared with what market professionals expect for future sales is lower than for 90% of comparable companies, indicating a good value for Ovinitiv's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 91% 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 79. Compared with other companies in the same industry, dividend yields of Ovinitiv are expected to be higher than for 69% of all competitors (a Dividend Yield rank of 69). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a strong buy recommendation based on Ovinitiv'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 Ovinitiv based on its detailed value metrics.
Growth Strategy: Ovinitiv Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Ovinitiv 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 metrics below average for Ovinitiv. While Profit Growth has a good rank of 89, as professionals currently expect the company to grow its profits more than 89% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 30, which means that currently professionals expect the company to grow less than 70% of its competitors, while Capital Growth has a rank of 8 and Stock Returns have been below market median, with a rank of 29 (71% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a SELL recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Ovinitiv Debt Financing Safety below-average
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 27 |
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ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company Ovinitiv 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 Ovinitiv 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 all three metrics below average for Ovinitiv. Liquidity is at 39, meaning that the company generates less profit to service its debt than 61% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 42, meaning the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. Finally, Refinancing is at a rank of 17 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 83% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 27 (worse than 73% compared with alternatives), Ovinitiv has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: Ovinitiv Above-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 51 |
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ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), Ovinitiv (Oil & Gas Production, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Ovinitiv are a good value (attractively priced) with a consolidated Obermatt Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 19), and are riskily financed (Safety Rank of 27), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 51, is a buy recommendation based on Ovinitiv's financial characteristics. As the company Ovinitiv's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 19) and risky financing practices (Obermatt Safety Rank of 27), 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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