November 2, 2023
Top 10 Stock GWA 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: GWA – Top 10 Stock in SDG 9: Industry, Innovation and Infrastructure
GWA is listed as a top 10 stock on November 02, 2023 in the market index SDG 9 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. Based on the Obermatt 360° View of 60 (high 60% performer), Obermatt assesses an overall buy recommendation for GWA on November 02, 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° View GWA Buy
| 360 METRICS | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 53 |
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| 360° VIEW | ||||||||
| 360° VIEW | 60 |
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ANALYSIS: With an Obermatt 360° View of 60 (better than 60% compared with alternatives), overall professional sentiment and financial characteristics for the stock GWA are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for GWA. The consolidated Value Rank has an attractive rank of 59, which means that the share price of GWA is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 59% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 55, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 53. But the company’s financing is risky with a Safety rank of 39. This means 61% of comparable companies have a safer financing structure than GWA. ...read more
RECOMMENDATION: With a consolidated 360° View of 60, GWA is better positioned than 60% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 59), above-average growth (Growth Rank of 55), and positive market sentiment in the professional investor community (Sentiment Rank of 53), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 39), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of GWA is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for GWA positive
ANALYSIS: With an Obermatt Sentiment Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock GWA is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for GWA. 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. In addition, Analyst Opinions Change has a rank of 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in GWA. Finally, the Professional Investors rank is 78, which means that currently, professional investors hold more stock in this company than in 78% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 53 (more positive than 53% compared with investment alternatives), GWA has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 24, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 76% of competitors). This could mean future risks and should make investors careful. Attention to negative news for GWA is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: GWA Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), GWA shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for GWA. Price-to-Profit (also referred to as price-earnings, P/E) is 75 which means that the stock price compared with what market professionals expect for future profits is lower than for 75% of comparable companies, indicating a good value concerning GWA'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 37, which means that the stock price is lower as regards to invested capital than for 37% of comparable investments. On the other hand, Price-to-Sales is less favorable than 57% of alternatives (only 43% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 0% 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 59, is a buy recommendation based on GWA's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: GWA Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), GWA 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, where half of the indicators are below and half above average for GWA. Profit Growth, with a rank of 51 (better than 51% of its competitors), and Capital Growth, with a rank of 91, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 41, which means that, currently, professionals expect the company to grow less than 59% of its competitors, and Stock Returns are at a rank of 15. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: GWA Debt Financing Safety below-average
| SAFETY METRICS | November 2, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 43 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% compared with alternatives), the company GWA has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of GWA 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 GWA. Liquidity is at 34, meaning that the company generates less profit to service its debt than 66% 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 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Finally, Refinancing is at a rank of 43 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% compared with alternatives), GWA has a financing structure that is 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: GWA Above-Average Financial Performance
| COMBINED PERFORMANCE | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 63 |
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ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), GWA (Building Products, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of GWA are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), show above-average growth (Growth Rank of 55) but are riskily financed (Safety Rank of 39), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 63, is a buy recommendation based on GWA's financial characteristics. As the company GWA's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 59) and above-average growth (Obermatt Growth Rank of 55), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 39) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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