May 11, 2023
Top 10 Stock Persimmon 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: Persimmon – Top 10 Stock in Wood & Timber Industry
Persimmon is listed as a top 10 stock on May 11, 2023 in the market index Timber Industry because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° Rank of 19 (19% performer), Obermatt issues an overall sell recommendation for Persimmon on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Homebuilding |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Customer Focus EU, Employee Focus EU, Timber Industry |
| Size class | X-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 Persimmon Sell
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 19 |
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| 360° VIEW | ||||||||
| 360° VIEW | 19 |
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ANALYSIS: With an Obermatt 360° Rank of 19 (better than 19% compared with alternatives), overall professional sentiment and engagement for the stock Persimmon are critical, mostly below average. The 360° Rank is based on consolidating four consolidated indicators, with three out of four metrics below average for Persimmon. The only rank that is above average is the consolidated Safety Rank at 98, which means that the company has a financing structure that is safer than 98% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 29, which means that the share price of Persimmon is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 9, which implies 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. Finally, the consolidated Sentiment Rank is also low at a rank of 19, which means that professional investors are more pessimistic about the stock than for 81% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a 360° Rank of 19, Persimmon is worse than 81% of all alternative stock investment opportunities based on the Obermatt Method. This means that Persimmon shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 19. The negative market view on Persimmon may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least important of the four, we cannot identify enough positive facts that are visible today 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 visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Persimmon negative
ANALYSIS: With an Obermatt Sentiment Rank of 19 (better than 19% compared with alternatives), overall professional sentiment and engagement for the stock Persimmon is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Persimmon. Analyst Opinions are at a rank of 10 (worse than 90% 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 16, which means that stock research experts are getting pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 18, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 82% of competitors). On the upside, the Professional Investors rank is 79, which means that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 19 (less encouraging than 81% compared with investment alternatives), Persimmon has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Persimmon stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Persimmon Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Persimmon shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Persimmon. Expected dividend yields are higher than 59% of comparable companies (a Dividend Yield rank of 59), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales has a value of 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning Persimmon's sales levels. Price-to-Profit (also referred to as price-earnings, P/E) is also unfavorable for Persimmon with a rank of 30. This means that the stock price, compared with what market professionals expect for future profits, is higher than 70% of comparable companies, indicating a low value concerning Persimmon's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a HOLD recommendation based on Persimmon's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Persimmon may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Persimmon Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Persimmon 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 three out of four indicators below-average for Persimmon. While Sales Growth ranks at 58, professionals currently expect the company to grow more than 58% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 1, which means that, currently, professionals expect the company to grow its profits less than 99% of its competitors, and Capital Growth has a rank of 21. Historic stock returns were also below average with a current Stock Returns rank of 19 which means that the stock returns have recently been below 81% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a SELL recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Persimmon Debt Financing Safety very solid
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 71 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2023, the company Persimmon has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Persimmon 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 Persimmon. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 71, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives), Persimmon has a financing structure that is significantly 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: Persimmon Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Persimmon (Homebuilding, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Persimmon are low in value (priced high) with a consolidated Obermatt Value Rank of 29 (worse than 71% of alternatives) and show below-average growth (Growth Rank of 9) but are safely financed (Safety Rank of 98), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 37, is a hold recommendation based on Persimmon's financial characteristics. As the company Persimmon's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 29) and low growth (Obermatt Growth Rank of 9), 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. In this case, good financing practices (Obermatt Safety Rank of 98) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive 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 used in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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