December 21, 2023
Top 10 Stock IAG 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: IAG – Top 10 Stock in Australian Securities Exchange Index ASX 100
IAG is listed as a top 10 stock on December 21, 2023 in the market index ASX 100 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 85 (top 85% performer), Obermatt assesses an overall strong buy recommendation for IAG on December 21, 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 IAG Strong Buy
| 360 METRICS | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 85 |
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ANALYSIS: With an Obermatt 360° View of 85 (better than 85% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock IAG are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for IAG. The consolidated Value Rank has an attractive rank of 57, which means that the share price of IAG 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 57% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 89, 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. The company is also safely financed with a Safety Rank of 90. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 35. Professional investors are more confident in 65% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 85, IAG is better positioned than 85% 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 57), above-average growth (Growth Rank of 89), and safe financing practices (Safety Rank of 90), 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 professional market sentiment is on the riskier side (Sentiment Rank of 35), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of IAG is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for IAG only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock IAG is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for IAG. Analyst Opinions are at a rank of 22 (worse than 78% 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 60, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in IAG. Even better, the Professional Investors rank is 61, meaning that professional investors hold more stock in this company than in 61% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 56, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 56% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), IAG has a reputation among professional investors that is below that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: IAG Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), IAG shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for IAG. Price-to-Sales (P/S) is 63, which means that the stock price compared with what market professionals expect for future sales is lower than for 63% of comparable companies, indicating a good value concerning IAG's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 67, which means that dividends are expected to be higher than for 67% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 72% of alternatives (only 28% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 57, is a buy recommendation based on IAG's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: IAG Growth Momentum high
| GROWTH METRICS | December 21, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 67 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 94 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 51 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 77 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 89 |
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ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2022, IAG 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 four indicators above average for IAG. Sales Growth has a value of 67, which means that, currently, professionals expect the company to grow more than 67% of its competitors. The same is valid for Profit Growth with a value of 94 and for Capital Growth with 51. In addition, Stock Returns had an above-average rank value of 77, which means they have been higher than 77% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, IAG exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: IAG Debt Financing Safety very solid
| SAFETY METRICS | December 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 59 |
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| REFINANCING | ||||||||
| REFINANCING | 46 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 90 |
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ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2022, the company IAG has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of IAG 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 IAG. Leverage is at a rank of 59, meaning the company has a below-average debt-to-equity ratio. It has less debt than 59% of its competitors. Liquidity is also good at a rank of 65, meaning the company generates more profit to service its debt than 65% 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 46, 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 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), IAG 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 IAG. 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
Combined financial peformance: IAG Top Financial Performance
| COMBINED PERFORMANCE | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), IAG (Property & Casualty Insurance, Australia) shares have much better financial characteristics than comparable stocks. Shares of IAG are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 89), and are safely financed (Safety Rank of 90), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on IAG's financial characteristics. As the company IAG's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 57), above-average growth (Obermatt Growth Rank of 89), and indicate that the company is safely financed (Obermatt Safety Rank of 90), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of IAG. 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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