November 23, 2023
Top 10 Stock Alphabet Strong Buy Recommendation

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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 Alphabet Strong Buy

360 METRICS	November 23, 2023
VALUE
VALUE	34
GROWTH
GROWTH	61
SAFETY
SAFETY	95
SENTIMENT
SENTIMENT	94
360° VIEW
360° VIEW	100

ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Alphabet are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Alphabet. 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. This means that growth is higher than for 61% of competitors in the same industry. The consolidated Safety Rank at 95 means that the company has a financing structure that is safer than 95% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 34, meaning that the share price of Alphabet is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 66% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 100, Alphabet is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 61), a safe financing structure (Safety Rank of 95), and positive professional market sentiment (Sentiment Rank of 94), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Alphabet compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (61% better than peers). The value rank could be the reverse reflection of that (39%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Alphabet very positive

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	81
OPINIONS CHANGE
OPINIONS CHANGE	74
PRO HOLDINGS
PRO HOLDINGS	96
MARKET PULSE
MARKET PULSE	55
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	94

ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Alphabet is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Alphabet. Analyst Opinions are at a rank of 81 (better than 81% 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 74, 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 Alphabet. The Professional Investors rank is 96, which means that currently, professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 55 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 55% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Alphabet 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 Alphabet 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

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Value Strategy: Alphabet Stock Price Value below-average critical

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	35
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	60
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	42
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	34

ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Alphabet shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Alphabet. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 60, which means that the stock price compared with what market professionals expect for future profits is lower than for 60% of comparable companies, indicating a good value concerning Alphabet's profit levels. But Price-to-Sales is 35 which means that the stock price compared with what market professionals expect for future profits is higher than for 65% of comparable companies, indicating a low value concerning Alphabet's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 42 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 34, is a hold recommendation based on Alphabet's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Alphabet is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more

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Growth Strategy: Alphabet Growth Momentum good

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	51
PROFIT GROWTH
PROFIT GROWTH	50
CAPITAL GROWTH
CAPITAL GROWTH	44
STOCK RETURNS
STOCK RETURNS	69
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61

ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Alphabet 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 Alphabet. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 50, and Stock Returns, with a rank of 69, are also above average. But Capital Growth only has a rank of 44, which means that, currently, professionals expect the company to grow its invested capital less than 56% 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. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more

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Safety Strategy: Alphabet Debt Financing Safety very solid

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	66
REFINANCING
REFINANCING	39
LIQUIDITY
LIQUIDITY	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	95

ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2023, the company Alphabet has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Alphabet 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, with two out of three indicators above average for Alphabet. Leverage is at a rank of 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 39, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 61% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), Alphabet has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Alphabet. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

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Combined financial peformance: Alphabet Top Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	34
GROWTH
GROWTH	61
SAFETY
SAFETY	100
COMBINED
COMBINED	84

ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Alphabet (Interactive Media & Services, USA) shares have much better financial characteristics than comparable stocks. Shares of Alphabet are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives). But they show above-average growth (Growth Rank of 61) and are safely financed (Safety Rank of 95, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Alphabet's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Alphabet exhibits low value (Obermatt Value Rank of 34), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 61). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 95) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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