May 11, 2023
Top 10 Stock Accent Group Strong 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: Accent Group – Top 10 Stock in Wood & Timber Industry
Accent Group 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. Two consolidated Obermatt Ranks are above-average. The company is growing above average, and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° Rank of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Accent Group on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Australia |
| Industry | Apparel Retail |
| Index | ASX 300, Timber Industry |
| Size class | Medium |
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 Accent Group Strong Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 82 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° Rank of 83 (better than 83% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Accent Group are very positive. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Accent Group. The consolidated Growth Rank has a good rank of 100, 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. This means that growth is higher than for 100% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 82, which means that professional investors are more optimistic about the stock than for 82% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 35, which means that the share price of Accent Group 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 65% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 26, which means that the company has a financing structure that is riskier than 74% 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° Rank of 83, Accent Group is better than 83% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 100), and professional market sentiment is positive (Sentiment Rank of 82), but value and safety are below average. The Safety Rank is the least important of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take one minus the growth rank, that is the minimum level that the value rank should have. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Accent Group very positive
ANALYSIS: With an Obermatt Sentiment Rank of 82 (better than 82% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Accent Group is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Accent Group. 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. But they are changing their opinions! Analyst Opinions Change has a rank of 59, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Accent Group. Even better, the Professional Investors rank is 74, meaning that professional investors hold more stock in this company than in 74% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 87, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 87% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 82 (more positive than 82% compared with investment alternatives), Accent Group has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Accent Group Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Accent Group shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Accent Group. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 84% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales has a value of 39 which means that the stock price compared with what market professionals expect for future profits is higher than 61% of comparable companies, indicating a low value concerning Accent Group's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 37 which means that the stock price compared with what market professionals expect for future profit levels is higher than 63% of comparable companies. In addition, Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 25 is also low. Compared with invested capital, the stock price is higher than for 75% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a HOLD recommendation based on Accent Group's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Accent Group? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Accent Group only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Accent Group Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2023, Accent Group 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 Accent Group. Profit Growth has a rank of 96 which means that currently professionals expect the company to grow its profits more than 96% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 88, and Stock Returns has a rank of 99 which means that the stock returns have recently been above 99% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 29 (71% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, 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: Accent Group Debt Financing Safety below-average
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 25 |
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| REFINANCING | ||||||||
| REFINANCING | 42 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company Accent Group 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 Accent Group 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 Accent Group. Liquidity is at 18, meaning that the company generates less profit to service its debt than 82% 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 25, meaning the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. Finally, Refinancing is at a rank of 42 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 58% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 26 (worse than 74% compared with alternatives), Accent Group has a financing structure that is 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. ...read more
Combined financial peformance: Accent Group Above-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| COMBINED | ||||||||
| COMBINED | 63 |
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ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), Accent Group (Apparel Retail, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of Accent Group are low in value (priced high) with a consolidated Obermatt Value Rank of 35 (worse than 65% of alternatives), and are riskily financed (Safety Rank of 26, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 63, is a buy recommendation based on Accent Group's financial characteristics. As the company Accent Group shows low value with an Obermatt Value Rank of 35 (65% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 100% of comparable companies (Obermatt Growth Rank is 100). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 26 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Accent Group, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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