May 11, 2023
Top 10 Stock First Majestic 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: First Majestic – Top 10 Stock in Silver Mining and Production
First Majestic is listed as a top 10 stock on May 11, 2023 in the market index Silver because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° Rank of 26 (26% performer), Obermatt assesses an overall hold recommendation for First Majestic on May 11, 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° Assessment First Majestic Hold
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| SENTIMENT | ||||||||
| SENTIMENT | 26 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° Rank of 26 (better than 26% compared with alternatives), overall professional sentiment and engagement for the stock First Majestic are below the industry average. The 360° Rank is based on consolidating four consolidated indicators, with three out of four indicators below average for First Majestic. The consolidated Growth Rank has a good rank of 93, 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. It ranks higher than 93% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 24 means that the share price of First Majestic is on the high side compared with its peer regarding revenues, profits, and invested capital. The stock price is higher than 76% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 24, which means that the company has a riskier financing structure than 76% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 26, indicating professional investors are more pessimistic about the stock than for 74% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° Rank of 26, First Majestic is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 93), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 26), the company is rather risky when it comes to financing (Safety Rank of 24). The negative market view on First Majestic may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of First Majestic compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for First Majestic only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 26 (better than 26% compared with alternatives), overall professional sentiment and engagement for the stock First Majestic is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for First Majestic. Analyst Opinions are at a rank of 29 (worse than 71% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 88, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in First Majestic. But the Professional Investors rank is low at 18, which means that professional investors hold less stock in this company than in 82% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 36, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 64% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 26 (less encouraging than 74% compared with investment alternatives), First Majestic has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: First Majestic Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 24 (worse than 76% compared with alternatives), First Majestic shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for First Majestic. Only Price-to-Book Capital (also referred to as market-to-book ratio) indicates good stock value with an Obermatt Price-to-Book Rank of 55, which means that the stock price is lower compared with invested capital than for 55% of comparable investments. All other value indicators are below the market median. Price-to-Sales has a value of 36 which means the stock price compared with what market professionals expect for future profits is higher than 64% of comparable companies, indicating a low value concerning First Majestic's revenue levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 55 and for dividend yields which is lower than 63% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 24, is a SELL recommendation based on First Majestic's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for First Majestic, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: First Majestic Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2023, First Majestic 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 First Majestic. Sales Growth has a value of 98 which means that currently professionals expect the company to grow more than 98% of its competitors. Profit Growth with a value of 100 and Capital Growth with a rank of 63 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 25, which means that stock returns have recently been below 75% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a BUY recommendation for growth and momentum investors. First Majestic has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for First Majestic, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: First Majestic Debt Financing Safety risky
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 41 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 4 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
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ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company First Majestic has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of First Majestic 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 First Majestic and the other two below average. Leverage is at a rank of 60 meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors.Refinancing is at a rank of 41, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 59% of its competitors. Liquidity is at a rank of 4, meaning that the company generates less profit to service its debt than 96% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 24 (worse than 76% compared with alternatives), First Majestic has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of First Majestic are on the safer side. ...read more
Combined financial peformance: First Majestic Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| COMBINED | ||||||||
| COMBINED | 30 |
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ANALYSIS: With an Obermatt Combined Rank of 30 (worse than 70% compared with investment alternatives), First Majestic (Silver, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of First Majestic are low in value (priced high) with a consolidated Obermatt Value Rank of 24 (worse than 76% of alternatives), and are riskily financed (Safety Rank of 24, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 30, is a hold recommendation based on First Majestic's financial characteristics. As the company First Majestic shows low value with an Obermatt Value Rank of 24 (76% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 24 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for First Majestic, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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