September 21, 2023
Top 10 Stock Redrow Buy Recommendation

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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 Redrow Buy

360 METRICS	September 21, 2023
VALUE
VALUE	46
GROWTH
GROWTH	19
SAFETY
SAFETY	100
SENTIMENT
SENTIMENT	51
360° VIEW
360° VIEW	53

ANALYSIS: With an Obermatt 360° View of 53 (better than 53% compared with alternatives), overall professional sentiment and financial characteristics for the stock Redrow are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Redrow. The consolidated Sentiment Rank has a good rank of 51, which means that professional investors are more optimistic about the stock than for 51% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 100 or better than 100% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 46, meaning that the share price of Redrow is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 19. ...read more

RECOMMENDATION: With a consolidated 360° View of 53, Redrow is better positioned than 53% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 51) and safe financing practices (Safety Rank of 100), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Redroẉ is bright. 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

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Sentiment Strategy: Professional Market Sentiment for Redrow positive

SENTIMENT METRICS	September 21, 2023
ANALYST OPINION
ANALYST OPINION	45
OPINIONS CHANGE
OPINIONS CHANGE	38
PRO HOLDINGS
PRO HOLDINGS	34
MARKET PULSE
MARKET PULSE	85
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	51

ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% 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 half the indicators below and half above average for Redrow. Analyst Opinions are at a rank of 45 (worse than 55% 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 38, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 34, which means that professional investors hold less stock in this company than in 66% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Redrow is Market Pulse, with a rank of 85, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 85% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Redrow has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more

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Value Strategy: Redrow Stock Price Value below-average critical

VALUE METRICS	September 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	79
DIVIDEND YIELD
DIVIDEND YIELD	41
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	46

ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), Redrow 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 Redrow. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning Redrow's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 79, which means that the stock price is lower as regards to invested capital than for 79% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 59% of alternatives (only 41% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 59% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 46, is a hold recommendation based on Redrow's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more

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Growth Strategy: Redrow Growth Momentum negative

GROWTH METRICS	September 21, 2023
REVENUE GROWTH
REVENUE GROWTH	12
PROFIT GROWTH
PROFIT GROWTH	43
CAPITAL GROWTH
CAPITAL GROWTH	15
STOCK RETURNS
STOCK RETURNS	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	19

ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% 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 all four metrics below average for Redrow. Sales Growth has a rank of 12, which means that currently professionals expect the company to grow less than 88% of its competitors. The same is valid for Profit Growth, with a rank of 43, and Capital Growth with 15. In addition, Stock Returns have a below market rank of 47, which means that the stock returns have recently been below 53% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, 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

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Safety Strategy: Redrow Debt Financing Safety very solid

SAFETY METRICS	September 21, 2023
LEVERAGE
LEVERAGE	95
REFINANCING
REFINANCING	90
LIQUIDITY
LIQUIDITY	92
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100

ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% 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 90, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 90% 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 a consolidated Safety Rank of 100 (better than 100% 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

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Combined financial peformance: Redrow Above-Average Financial Performance

COMBINED PERFORMANCE	September 21, 2023
VALUE
VALUE	46
GROWTH
GROWTH	19
SAFETY
SAFETY	92
COMBINED
COMBINED	65

ANALYSIS: With an Obermatt Combined Rank of 65 (better than 65% compared with investment alternatives), Redrow (Homebuilding, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Redrow are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 65, is a buy recommendation based on Redrow's financial characteristics. As the company Redrow's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 46) and low growth (Obermatt Growth 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. In this case, good financing practices (Obermatt Safety Rank of 100) 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 lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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