June 1, 2023
Top 10 Stock Redrow 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: Redrow – Top 10 Stock in SDG 15: Life on Land
Redrow is listed as a top 10 stock on June 01, 2023 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Redrow on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Homebuilding |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Customer Focus EU, Employee Focus EU, SDG 11, SDG 13, SDG 15, SDG 5, SDG 8 |
| 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 Redrow Strong Buy
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 70 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Redrow are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Redrow. The consolidated Value Rank has an attractive rank of 58, which means that the share price of Redrow is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 58% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 96. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 70. But the consolidated Growth Rank has a low rank of 15, which means that the company is below average in terms of growth, and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 85 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 77, Redrow is better than 77% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 58), secure financing practices (Safety Rank of 96), and positive market sentiment in the professional investor community (Sentiment Rank of 70). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company growth expectations are below the industry average (Growth Rank of 15), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good value ranking can sometimes indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Redrow is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Redrow positive
ANALYSIS: With an Obermatt Sentiment Rank of 70 (better than 70% compared with alternatives), overall professional sentiment and engagement for the stock Redrow is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Redrow. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Redrow. The Professional Investors rank is 50, which means that currently, professional investors hold more stock in this company than in 50% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 89 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 89% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 70 (more positive than 70% compared with investment alternatives), Redrow has a reputation among professional investors that is above-average compared with that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Redrow stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Redrow Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Redrow shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Redrow. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 65 which means that the stock price compared with what market professionals expect for future profits is lower than 65% of comparable companies, indicating a good value concerning Redrow's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 74, and it's also true for Dividend Yield with an Dividend Yield Rank of 50. But, compared with other companies in the same industry, the stock price is higher than average if compared with expected revenues; only 59% of all competitors have an even higher stock price compared with sales revenues (a Price-to-Sales Rank of 41). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a BUY recommendation based on Redrow's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Redrow has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Redrow shares. ...read more
Growth Strategy: Redrow Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Redrow 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 Redrow. Sales Growth has a below market rank of 8, which means that, currently, professionals expect the company to grow less than 92% of its competitors. The same is valid for Capital Growth, with a rank of 8, and Profit Growth, with a rank of 29. Currently, professionals expect the company to grow its profits less than 71% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 69, which means that the stock returns have recently been above 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Redrow, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Redrow Debt Financing Safety very solid
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 95 |
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| REFINANCING | ||||||||
| REFINANCING | 84 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company Redrow has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Redrow 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 Redrow. Leverage is at 95, meaning the company has a below-average debt-to-equity ratio. It has less debt than 95% of its competitors. Refinancing is at a rank of 84, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 84% of its competitors. Finally, Liquidity is also good at a rank of 92, which means that the company generates more profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives), Redrow 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: Redrow Above-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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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), Redrow (Homebuilding, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Redrow are a good value (attractively priced) with a consolidated Obermatt Value Rank of 58 (better than 58% of alternatives), are safely financed (Safety Rank of 96, which means low debt burdens), but show below-average growth (Growth Rank of 15). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 63, is a buy recommendation based on Redrow's financial characteristics. As the company Redrow's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 15) while being safely financed (Obermatt Safety Rank of 96), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 58% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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