September 14, 2023
Top 10 Stock Encore Wire 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: Encore Wire – Top 10 Stock in Solar Technology
Encore Wire is listed as a top 10 stock on September 14, 2023 in the market index Solar Tech because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 91 (top 91% performer), Obermatt assesses an overall strong buy recommendation for Encore Wire on September 14, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electr. Components & Equipment |
| Index | Solar Tech, NASDAQ |
| 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 Encore Wire Strong Buy
| 360 METRICS | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 91 |
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ANALYSIS: With an Obermatt 360° View of 91 (better than 91% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Encore Wire are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Encore Wire. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Encore Wire is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 88% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 95. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. But the consolidated Growth Rank has a low rank of 31, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 69 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 91, Encore Wire is better positioned than 91% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 88), secure financing practices (Safety Rank of 95), and positive market sentiment in the professional investor community (Sentiment Rank of 85). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 31), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Encore Wire is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Encore Wire very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Encore Wire is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Encore Wire. Analyst Opinions are at a rank of 97 (better than 97% 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 currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 86, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 86% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 47, which means that currently, professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Encore Wire has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Encore Wire may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Encore Wire. ...read more
Value Strategy: Encore Wire Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2022, Encore Wire shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Encore Wire. Price-to-Sales is 55 which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value for Encore Wire'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 61. Compared with other companies in the same industry, dividend yields of Encore Wire are expected to be higher than for 59% of all competitors (a Dividend Yield rank of 59). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Encore Wire'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 Encore Wire based on its detailed value metrics.
Growth Strategy: Encore Wire Growth Momentum low
| GROWTH METRICS | September 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 16 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 18 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 77 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 59 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 31 |
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ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Encore Wire shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Encore Wire. Capital Growth has a rank of 77, which means that currently professionals expect the company to grow its invested capital more than 18% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has only a rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors, and Profit Growth is also low at a rank of 18. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Encore Wire, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Encore Wire Debt Financing Safety very solid
| SAFETY METRICS | September 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 80 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 97 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 95 |
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ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2022, the company Encore Wire has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Encore Wire 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, where all three are above average for Encore Wire. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 80, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 80% of its competitors. Finally, Liquidity is also good at a rank of 97, which means that the company generates more profit to service its debt than 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), Encore Wire has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Encore Wire Top Financial Performance
| COMBINED PERFORMANCE | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 97 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), Encore Wire (Electr. Components & Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Encore Wire are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), are safely financed (Safety Rank of 95, which means low debt burdens), but show below-average growth (Growth Rank of 31). ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong buy recommendation based on Encore Wire's financial characteristics. As the company Encore Wire's key financial metrics exhibit good value (Obermatt Value Rank of 88) but low growth (Obermatt Growth Rank of 31) while being safely financed (Obermatt Safety Rank of 95), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 88% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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