January 11, 2024
Top 10 Stock Mitsubishi Chemical 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: Mitsubishi Chemical – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Mitsubishi Chemical is listed as a top 10 stock on January 11, 2024 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 59 (high 59% performer), Obermatt assesses an overall buy recommendation for Mitsubishi Chemical on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Diversified Chemicals |
| Index | TOPIX 100, Nikkei 225 |
| 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 Mitsubishi Chemical Buy
| 360 METRICS | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 28 |
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| SENTIMENT | ||||||||
| SENTIMENT | 62 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° View of 59 (better than 59% compared with alternatives), overall professional sentiment and financial characteristics for the stock Mitsubishi Chemical are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Mitsubishi Chemical. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Mitsubishi Chemical is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 93% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 62, which means that professional investors are more optimistic about the stock than for 62% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 45, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 28, meaning the company has a riskier financing structure than 72 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 59, Mitsubishi Chemical is better positioned than 59% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 93) and positive market sentiment in the professional investor community (Sentiment Rank of 62), but growth expectations are below-average (Growth Rank of 45) and the financing structure is on the risky side(Safety Rank of 28). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive 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. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Mitsubishi Chemical is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Mitsubishi Chemical positive
ANALYSIS: With an Obermatt Sentiment Rank of 62 (better than 62% compared with alternatives), overall professional sentiment and engagement for the stock Mitsubishi Chemical is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Mitsubishi Chemical. Analyst Opinions are at a rank of 23 (worse than 77% 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 92, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Mitsubishi Chemical. More encouragingly, the Professional Investors rank is 85, which means that professional investors hold more stock in this company than in 85% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 11, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 89% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 62 (more positive than 62% compared with investment alternatives), Mitsubishi Chemical has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Mitsubishi Chemical. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Mitsubishi Chemical Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2024, Mitsubishi Chemical shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Mitsubishi Chemical. Price-to-Sales is 91 which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value for Mitsubishi Chemical's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 87% 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 65. Compared with other companies in the same industry, dividend yields of Mitsubishi Chemical are expected to be higher than for 85% of all competitors (a Dividend Yield rank of 85). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on Mitsubishi Chemical'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 Mitsubishi Chemical based on its detailed value metrics.
Growth Strategy: Mitsubishi Chemical Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Mitsubishi Chemical shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Mitsubishi Chemical. Profit Growth has a rank of 79, which means that currently professionals expect the company to grow its profits more than 79% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 75 (above 75% of alternative investments). But Sales Growth has a below the median rank of 15, which means that, currently, professionals expect the company to grow less than 85% of its competitors, and Capital Growth also has a lower rank of 33. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Mitsubishi Chemical. ...read more
Safety Strategy: Mitsubishi Chemical Debt Financing Safety below-average
| SAFETY METRICS | January 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 8 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 36 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
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ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Mitsubishi Chemical 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 Mitsubishi Chemical 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 Mitsubishi Chemical and the other two below average. Refinancing is at 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Liquidity is also on the riskier side with a rank of 36, meaning the company generates less profit to service its debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Mitsubishi Chemical has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Mitsubishi Chemical are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Mitsubishi Chemical Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Mitsubishi Chemical (Diversified Chemicals, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Mitsubishi Chemical are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives) but show below-average growth (Growth Rank of 45), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Mitsubishi Chemical's financial characteristics. As the company Mitsubishi Chemical's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 45) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 93% 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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