August 31, 2023
Top 10 Stock Lear 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: Lear – Top 10 Stock in Diversity Leaders in United States
Lear is listed as a top 10 stock on August 31, 2023 in the market index Diversity USA because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for Lear on August 31, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Auto Parts & Equipment |
| Index | Diversity USA, Human Rights, S&P MIDCAP |
| Size class | XX-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 Lear Strong Buy
| 360 METRICS | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 80 |
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| 360° VIEW | ||||||||
| 360° VIEW | 95 |
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ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Lear are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Lear. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Lear 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 88% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 85, 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 73. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 80. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, Lear is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 88), above-average growth (Growth Rank of 85), safe financing practices (Safety Rank of 73), and a positive market sentiment in the professional investor community (Sentiment Rank of 80), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Lear is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Lear very positive
ANALYSIS: With an Obermatt Sentiment Rank of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Lear is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Lear. Analyst Opinions are at a rank of 24 (worse than 76% 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 77, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Lear. Even better, the Professional Investors rank is 98, meaning that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 78, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 78% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 80 (more positive than 80% compared with investment alternatives), Lear has a reputation among professional investors that is significantly higher than 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: Lear Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2023, Lear shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Lear. Price-to-Sales is 83 which means that the stock price compared with what market professionals expect for future sales is lower than for 83% of comparable companies, indicating a good value for Lear's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 79% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 53. Compared with other companies in the same industry, dividend yields of Lear are expected to be higher than for 74% of all competitors (a Dividend Yield rank of 74). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Lear's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Lear based on its detailed value metrics.
Growth Strategy: Lear Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2023, Lear 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 Lear. Sales Growth has a value of 61 which means that currently professionals expect the company to grow more than 61% of its competitors. Profit Growth with a value of 77 and Capital Growth with a rank of 68 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 49, which means that stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. Lear has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Lear, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Lear Debt Financing Safety above-average
| SAFETY METRICS | August 31, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 57 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company Lear has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Lear 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, where all three are above average for Lear. Leverage is at 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors. Refinancing is at a rank of 57, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Finally, Liquidity is also good at a rank of 60, which means that the company generates more profit to service its debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 73 (better than 73% compared with alternatives), Lear has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Lear Top Financial Performance
| COMBINED PERFORMANCE | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), Lear (Auto Parts & Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Lear are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), show above-average growth (Growth Rank of 85), and are safely financed (Safety Rank of 73), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on Lear's financial characteristics. As the company Lear's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 88), above-average growth (Obermatt Growth Rank of 85), and indicate that the company is safely financed (Obermatt Safety Rank of 73), 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 Lear. 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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