December 14, 2023
Top 10 Stock PacWest 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: PacWest – Top 10 Stock in Dow Jones U.S. Regional Banks Index
PacWest is listed as a top 10 stock on December 14, 2023 in the market index D.J. US Banks because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 8 (8% performer), Obermatt issues an overall sell recommendation for PacWest on December 14, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | Dividends USA, NASDAQ, D.J. US Banks, 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 PacWest Sell
| 360 METRICS | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 8 |
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ANALYSIS: With an Obermatt 360° View of 8 (better than 8% compared with alternatives), overall professional sentiment and financial characteristics for the stock PacWest are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for PacWest. The consolidated Value Rank has a low rank of 43 which means that the share price of PacWest is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 57% of alternative stocks in the same industry. The consolidated Growth Rank also 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. This means that growth is lower than for 1% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 19, which means that the company has a riskier financing structure than 81% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 1, which means that professional investors are more pessimistic about the stock than for 99% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 8, PacWest is worse than 92% of all alternative stock investment opportunities based on the Obermatt Method. This means that PacWest shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 1. The negative market view on PacWest may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While PacWest may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for PacWest negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock PacWest is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for PacWest. Analyst Opinions are at a rank of 36 (worse than 64% 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 24 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 1, 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 99% of competitors). No wonder, the Professional Investors rank is only 1, which means that professional investors hold less stock in this company than in 99% of alternative investment opportunities. Pros tend to stay away from PacWest, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), PacWest has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: PacWest Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), PacWest shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for PacWest. Price-to-Sales (P/S) is 97 which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value for PacWest's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 97. Finally, compared with other companies in the same industry, dividend yields of PacWest are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). The only low rank is for expected profits with a Price-to-Profit Rank of 1, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on PacWest's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: PacWest Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 1 (better than 1% compared with alternatives), PacWest 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 PacWest. Sales Growth has a rank of 19, which means that currently professionals expect the company to grow less than 81% of its competitors. The same is valid for Profit Growth, with a rank of 7, and Capital Growth with 49. In addition, Stock Returns have a below market rank of 1, which means that the stock returns have recently been below 99% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth 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 outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: PacWest Debt Financing Safety risky
| SAFETY METRICS | December 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 95 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 13 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 19 |
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ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company PacWest 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 PacWest 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 PacWest and the other two below average. Refinancing is at 95, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. But Leverage is high with a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Liquidity is also on the riskier side with a rank of 13, meaning the company generates less profit to service its debt than 87% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), PacWest has a financing structure that is significantly 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 PacWest 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: PacWest Lowest Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 13 |
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| COMBINED | ||||||||
| COMBINED | 24 |
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ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), PacWest (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of PacWest are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives), show below-average growth (Growth Rank of 1), and are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on PacWest's financial characteristics. As the company PacWest's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 43), low growth (Obermatt Growth Rank of 1), and risky financing practices (Obermatt Safety Rank of 19), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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