May 11, 2023
Top 10 Stock Incitec Pivot 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: Incitec Pivot – Top 10 Stock in Australian Securities Exchange Index ASX 100
Incitec Pivot is listed as a top 10 stock on May 11, 2023 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, providing mixed investment signals. Based on the Obermatt 360° Rank of 11 (11% performer), Obermatt issues an overall sell recommendation for Incitec Pivot on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Australia |
| Industry | Diversified Chemicals |
| Index | ASX 100, ASX 200, ASX 300, Water Efficiency |
| 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° Assessment Incitec Pivot Sell
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 30 |
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| SENTIMENT | ||||||||
| SENTIMENT | 26 |
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| 360° VIEW | ||||||||
| 360° VIEW | 11 |
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ANALYSIS: With an Obermatt 360° Rank of 11 (better than 11% compared with alternatives), overall professional sentiment and engagement for the stock Incitec Pivot are critical, mostly below average. The 360° Rank is based on consolidating four consolidated indicators, with three out of four indicators below average for Incitec Pivot. Only the consolidated Value Rank has an attractive rank of 69, which means that the share price of Incitec Pivot is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 69% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 1, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 30, meaning the company has a riskier financing structure than 70% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 74% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 26. ...read more
RECOMMENDATION: With a 360° Rank of 11, Incitec Pivot is worse than 89% of all alternative stock investment opportunities based on the Obermatt Method. This means that Incitec Pivot shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 69. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 1), a riskier financing structure (Safety Rank of 30), and negative market sentiment in the professional investor community (Sentiment Rank of 26). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Incitec Pivot is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Incitec Pivot. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Incitec Pivot only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 26 (better than 26% compared with alternatives), overall professional sentiment and engagement for the stock Incitec Pivot is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Incitec Pivot. Analyst Opinions are at a rank of 46 (worse than 54% 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 32, which means that stock research experts are getting pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 25, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 75% of competitors). On the upside, the Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 26 (less encouraging than 74% compared with investment alternatives), Incitec Pivot has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Incitec Pivot stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Incitec Pivot Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Incitec Pivot 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 Incitec Pivot. Price-to-Profit (also referred to as price-earnings, P/E) has a value of 78 which means that the stock price compared with what market professionals expect for future profits is lower than 78% of comparable companies, indicating a good value concerning Incitec Pivot's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 48, which means that the stock price is lower compared with invested capital than for 48% of comparable investments. On the other hand, Price-to-Sales is less favorable than 64% of alternatives (only 36% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a BUY recommendation based on Incitec Pivot'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, sealing the company's fate early. This needs to be investigated, and the company's optimism verified before deciding to buy the stock. ...read more
Growth Strategy: Incitec Pivot Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 1 (better than 1% compared with alternatives), Incitec Pivot shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Incitec Pivot. Sales Growth has a rank of 1, which means that currently professionals expect the company to grow less than 99% of its competitors. The same is valid for Profit Growth, with a rank of 20, and Capital Growth with 25. In addition, Stock Returns have a below market rank of 35, which means that the stock returns have recently been below 65% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 1, is a SELL recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's prospects, especially Sentiment performance, because it may be a turnaround situation that could entail above-average returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Incitec Pivot Debt Financing Safety below-average
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
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ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company Incitec Pivot 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 Incitec Pivot 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 just one indicator above average for Incitec Pivot and the other two below average. Leverage is at a rank of 52 meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors.Refinancing is at a rank of 25, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 75% of its competitors. Liquidity is at a rank of 40, meaning that the company generates less profit to service its debt than 60% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 30 (worse than 70% compared with alternatives), Incitec Pivot has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Incitec Pivot are on the safer side. ...read more
Combined financial peformance: Incitec Pivot Lowest Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| COMBINED | ||||||||
| COMBINED | 18 |
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ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Incitec Pivot (Diversified Chemicals, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Incitec Pivot are a good value (attractively priced) with a consolidated Obermatt Value Rank of 69 (better than 69% of alternatives) but show below-average growth (Growth Rank of 1), and are riskily financed (Safety Rank of 30), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 18, is a sell recommendation based on Incitec Pivot's financial characteristics. As the company Incitec Pivot's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 1) and risky financing practices (Obermatt Safety Rank of 30), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 69% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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