August 31, 2023
Top 10 Stock Exxaro 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: Exxaro – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Exxaro is listed as a top 10 stock on August 31, 2023 in the market index JSE All Shares 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 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for Exxaro on August 31, 2023.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Coal & Consumable Fuels |
| Index | Low Emissions, Energy Efficient, Water Efficiency, JSE All Shares |
| 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 Exxaro Strong Buy
| 360 METRICS | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Exxaro are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Exxaro. The consolidated Value Rank has an attractive rank of 81, which means that the share price of Exxaro 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 81% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 70. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 81. But the consolidated Growth Rank has a low rank of 43, 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. 57 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, Exxaro is better positioned than 92% 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 81), secure financing practices (Safety Rank of 70), and positive market sentiment in the professional investor community (Sentiment Rank of 81). 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 43), 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 Exxaro 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 Exxaro very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Exxaro is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Exxaro. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 69, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Exxaro. The Professional Investors rank is 67, which means that currently, professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 56 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 56% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 81 (more positive than 81% compared with investment alternatives), Exxaro has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Exxaro stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Exxaro Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2023, Exxaro shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Exxaro. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 86 which means that the stock price compared with what market professionals expect for future profits is lower than for 86% of comparable companies, indicating a good value concerning Exxaro's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 69, and for Dividend Yield with a Dividend Yield Rank of 98. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 75% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 25). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Exxaro's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Exxaro has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Exxaro shares. ...read more
Growth Strategy: Exxaro Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Exxaro 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 three out of four indicators below average for Exxaro. Only Capital Growth has a good rank of 74, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 34 which means that currently professionals expect the company to grow less than 66% of its competitors. Profit Growth with a rank of 27 and Stock Returns with a rank of 35 are also low (below 65% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Exxaro is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Exxaro Debt Financing Safety above-average
| SAFETY METRICS | August 31, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 69 |
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| REFINANCING | ||||||||
| REFINANCING | 73 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 57 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 70 |
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ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Exxaro has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Exxaro 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 Exxaro. Leverage is at 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors. Refinancing is at a rank of 73, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 73% of its competitors. Finally, Liquidity is also good at a rank of 57, which means that the company generates more profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Exxaro has a financing structure that is 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: Exxaro Top Financial Performance
| COMBINED PERFORMANCE | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Exxaro (Coal & Consumable Fuels, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Exxaro are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives), are safely financed (Safety Rank of 70, which means low debt burdens), but show below-average growth (Growth Rank of 43). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Exxaro's financial characteristics. As the company Exxaro's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 43) while being safely financed (Obermatt Safety Rank of 70), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 81% 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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