May 25, 2023
Top 10 Stock PP (Persero) 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: PP (Persero) – Top 10 Stock in Jakarta Composite Index IDX Composite
PP (Persero) is listed as a top 10 stock on May 25, 2023 in the market index IDX Composite 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 and professional market sentiment is positive, it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for PP (Persero) on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | Indonesia |
| Industry | Construction & Engineering |
| Index | IDX Composite |
| Size class | 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 PP (Persero) Buy
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock PP (Persero) are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for PP (Persero). The consolidated Value Rank has an attractive rank of 93, which means that the share price of PP (Persero) 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 93% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 37, 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 34, meaning the company has a riskier financing structure than 66 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 54, PP (Persero) is better than 54% 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 59), but growth expectations are below-average (Growth Rank of 37) and the financing structure is on the risky side(Safety Rank of 34). 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 (high 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 PP (Persero) 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 PP (Persero) positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock PP (Persero) is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for PP (Persero). Analyst Opinions are at a rank of 51 (better than 51% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 97, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 97% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 12, which means that currently, professional investors hold less stock in this company than in 88% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), PP (Persero) has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in PP (Persero) may be less of an issue, especially if the stock is from a smaller company. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in PP (Persero). ...read more
Value Strategy: PP (Persero) Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2023, PP (Persero) shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for PP (Persero). Price-to-Sales has a value of 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for PP (Persero)'s revenue size. The same is valid for expected Price-to-Profits, more favorable than for 84% 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 97. Compared with other companies in the same industry, dividend yields of PP (Persero) are expected to be higher than for 73% of all competitors (a Dividend Yield rank of 73). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a strong buy recommendation based on PP (Persero)'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 PP (Persero) based on its detailed value metrics.
Growth Strategy: PP (Persero) Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), PP (Persero) 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 PP (Persero). Sales Growth has a rank of 82 which means that currently, professionals expect the company to grow more than 82% of its competitors. Capital Growth is also above 37% of competitors with a rank of 63. But Profit Growth only has a rank of 37, which means that currently professionals expect the company to grow its profits less than 63% of its competitors. And Stock Returns have also been below average with a rank of only 7. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a HOLD recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: PP (Persero) Debt Financing Safety below-average
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company PP (Persero) 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 PP (Persero) 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 PP (Persero) and the other two below average. Refinancing is at 100, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. But Leverage is high with a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Liquidity is also on the riskier side with a rank of 18, meaning the company generates less profit to service its debt than 82% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 34 (worse than 66% compared with alternatives), PP (Persero) 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 PP (Persero) 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 a financial decision. ...read more
Combined financial peformance: PP (Persero) Above-Average Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| COMBINED | ||||||||
| COMBINED | 54 |
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ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), PP (Persero) (Construction & Engineering, Indonesia) shares have above-average financial characteristics compared with similar stocks. Shares of PP (Persero) are a good value (attractively priced) with a consolidated Obermatt Value Rank of 93 (better than 93% of alternatives) but show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 54, is a buy recommendation based on PP (Persero)'s financial characteristics. As the company PP (Persero)'s key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 37) and risky financing practices (Obermatt Safety Rank of 34), 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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