August 24, 2023
Top 10 Stock Encompass 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: Encompass – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Encompass is listed as a top 10 stock on August 24, 2023 in the market index D.J. US Health Care 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 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for Encompass on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Facilities |
| Index | Dividends USA, D.J. US Health Care, S&P MIDCAP |
| 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 Encompass Strong Buy
| 360 METRICS | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 96 |
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ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Encompass are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Encompass. The consolidated Value Rank has an attractive rank of 50, which means that the share price of Encompass 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 50% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 81, 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 100. But the company’s financing is risky with a Safety rank of 31. This means 69% of comparable companies have a safer financing structure than Encompass. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, Encompass is better positioned than 96% 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 50), above-average growth (Growth Rank of 81), and positive market sentiment in the professional investor community (Sentiment Rank of 100), 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 31), 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 Encompass 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 Encompass very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Encompass is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Encompass. 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 94, 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 Encompass. The Professional Investors rank is 90, which means that currently, professional investors hold more stock in this company than in 90% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 76 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 76% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Encompass 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 Encompass 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: Encompass Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), Encompass shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Encompass. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 79% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 32 which means that the stock price compared with what market professionals expect for future profits is higher than 68% of comparable companies, indicating a low value concerning Encompass's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 45 which means that the stock price compared with what market professionals expect for future profit levels is higher than 55% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 21 is also low. Compared with invested capital, the stock price is higher than for 79% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on Encompass's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Encompass? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Encompass only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Encompass Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2023, Encompass 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 Encompass. Sales Growth has a rank of 67 which means that currently, professionals expect the company to grow more than 67% of its competitors. Both Profit Growth, with a rank of 71, and Stock Returns, with a rank of 97, are also above average. But Capital Growth only has a rank of 25, which means that, currently, professionals expect the company to grow its invested capital less than 75% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, 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
Safety Strategy: Encompass Debt Financing Safety below-average
| SAFETY METRICS | August 24, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 40 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Encompass 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 Encompass 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 Encompass. Liquidity is at 45, meaning that the company generates less profit to service its debt than 55% 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 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Finally, Refinancing is at a rank of 40 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Encompass 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: Encompass Above-Average Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| COMBINED | ||||||||
| COMBINED | 59 |
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ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Encompass (Health Care Facilities, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Encompass are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives), show above-average growth (Growth Rank of 81) but are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Encompass's financial characteristics. As the company Encompass's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 50) and above-average growth (Obermatt Growth Rank of 81), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 31) 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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