September 28, 2023
Top 10 Stock McMillan Shakespeare 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: McMillan Shakespeare – Top 10 Stock in Australian Securities Exchange Index ASX 300
McMillan Shakespeare is listed as a top 10 stock on September 28, 2023 in the market index ASX 300 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 15 (15% performer), Obermatt issues an overall sell recommendation for McMillan Shakespeare on September 28, 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 McMillan Shakespeare Sell
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 55 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| SENTIMENT | ||||||||
| SENTIMENT | 9 |
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| 360° VIEW | ||||||||
| 360° VIEW | 15 |
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ANALYSIS: With an Obermatt 360° View of 15 (better than 15% compared with alternatives), overall professional sentiment and financial characteristics for the stock McMillan Shakespeare are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for McMillan Shakespeare. The consolidated Value Rank has an attractive rank of 55, which means that the share price of McMillan Shakespeare 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 55% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 87, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 9. Professional investors are more confident in 91% other stocks. Worryingly, the company has risky financing, with a Safety rank of 4. This means 96% of comparable companies have a safer financing structure than McMillan Shakespeare. ...read more
RECOMMENDATION: With a consolidated 360° View of 15, McMillan Shakespeare is worse than 85% of all alternative stock investment opportunities based on the Obermatt Method. This means that McMillan Shakespeare shares are on the riskier side for investors. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 55 and the Growth Rank above-average at 87, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 9. In addition, the company financing structure is on the riskier side (Safety Rank of 4). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for McMillan Shakespeare negative
ANALYSIS: With an Obermatt Sentiment Rank of 9 (better than 9% compared with alternatives), overall professional sentiment and engagement for the stock McMillan Shakespeare is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for McMillan Shakespeare. Analyst Opinions are at a rank of 13 (worse than 87% 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 72, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in McMillan Shakespeare. But the Professional Investors rank is low at 19, which means that professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 45, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 55% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 9 (less encouraging than 91% compared with investment alternatives), McMillan Shakespeare has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: McMillan Shakespeare Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 55 (better than 55% compared with alternatives), McMillan Shakespeare 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 McMillan Shakespeare. Price-to-Profit (also referred to as price-earnings, P/E) is 85 which means that the stock price compared with what market professionals expect for future profits is lower than for 85% of comparable companies, indicating a good value concerning McMillan Shakespeare'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 5, which means that the stock price is lower as regards to invested capital than for 5% of comparable investments. On the other hand, Price-to-Sales is less favorable than 66% of alternatives (only 34% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 2% 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 55, is a buy recommendation based on McMillan Shakespeare'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: McMillan Shakespeare Growth Momentum high
| GROWTH METRICS | September 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 34 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 54 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 61 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 95 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 87 |
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ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2023, McMillan Shakespeare 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 McMillan Shakespeare. Profit Growth has a rank of 54 which means that currently professionals expect the company to grow its profits more than 54% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 61, and Stock Returns has a rank of 95 which means that the stock returns have recently been above 95% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 34 (66% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: McMillan Shakespeare Debt Financing Safety risky
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 8 |
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| REFINANCING | ||||||||
| REFINANCING | 14 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 17 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
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ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company McMillan Shakespeare has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of McMillan Shakespeare 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 McMillan Shakespeare. Liquidity is at 17, meaning that the company generates less profit to service its debt than 83% 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 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Finally, Refinancing is at a rank of 14 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 86% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% compared with alternatives), McMillan Shakespeare has a financing structure that is significantly 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: McMillan Shakespeare Below-Average Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 55 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 17 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), McMillan Shakespeare (HR- & Employment Services, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of McMillan Shakespeare are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives), show above-average growth (Growth Rank of 87) but are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on McMillan Shakespeare's financial characteristics. As the company McMillan Shakespeare's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 55) and above-average growth (Obermatt Growth Rank of 87), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 4) 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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