August 17, 2023
Top 10 Stock FQM Sell 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: FQM – Top 10 Stock in Lithium Mining and Production
FQM is listed as a top 10 stock on August 17, 2023 in the market index Lithium 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° View of 12 (12% performer), Obermatt issues an overall sell recommendation for FQM on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Copper |
| Index | Copper, Human Rights, Iron, Lithium, Low Waste, Rare Earth, Renewables Users, Recycling, Silver, Uranium, TSX Composite |
| 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° View FQM Sell
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 10 |
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| 360° VIEW | ||||||||
| 360° VIEW | 12 |
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ANALYSIS: With an Obermatt 360° View of 12 (better than 12% compared with alternatives), overall professional sentiment and financial characteristics for the stock FQM are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for FQM. The consolidated Growth Rank has a good rank of 61, 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 61% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 32 means that the share price of FQM is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 68% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 14, which means that the company has a riskier financing structure than 86% 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 10, indicating professional investors are more pessimistic about the stock than for 90% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 12, FQM is worse than 88% of all alternative stock investment opportunities based on the Obermatt Method. This means that FQM shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 61), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 10), the company is rather risky when it comes to financing (Safety Rank of 14). The negative market view on FQM 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 FQM 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 FQM negative
ANALYSIS: With an Obermatt Sentiment Rank of 10 (better than 10% compared with alternatives), overall professional sentiment and engagement for the stock FQM is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for FQM. Analyst Opinions are at a rank of 34 (worse than 66% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 20 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 20, 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 80% of competitors). No wonder, the Professional Investors rank is only 23, which means that professional investors hold less stock in this company than in 77% of alternative investment opportunities. Pros tend to stay away from FQM, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 10 (less encouraging than 90% compared with investment alternatives), FQM has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: FQM Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), FQM shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for FQM. Price-to-Sales is 35 which means that the stock price compared with what market professionals expect for future profits is higher than 65% of comparable companies, indicating a low value concerning FQM's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 39, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of FQM. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 28 and Dividend Yield, which is lower than 56% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on FQM's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for FQM? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as FQM? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. FQM may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: FQM Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), FQM shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for FQM. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Capital Growth is also above 10% of competitors with a rank of 83, and Stock Returns with the rank of 77 is also an outperformance. Only Profit Growth is low with a rank of 10 which means that currently, professionals expect the company to grow its profits less than 90% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, FQM is a good growth stock. ...read more
Safety Strategy: FQM Debt Financing Safety risky
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 36 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company FQM 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 FQM 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 FQM. Liquidity is at 24, meaning that the company generates less profit to service its debt than 76% 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 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Finally, Refinancing is at a rank of 36 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), FQM has a financing structure that is significantly 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.
Combined financial peformance: FQM Lowest Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| COMBINED | ||||||||
| COMBINED | 20 |
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ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), FQM (Copper, Canada) shares have lower financial characteristics compared with similar stocks. Shares of FQM are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives), and are riskily financed (Safety Rank of 14, which means above-average debt burdens) but show above-average growth (Growth Rank of 61). ...read more
RECOMMENDATION: A Combined Rank of 20, is a sell recommendation based on FQM's financial characteristics. As the company FQM shows low value with an Obermatt Value Rank of 32 (68% 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 61% of comparable companies (Obermatt Growth Rank is 61). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 14 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 FQM, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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