December 14, 2023
Top 10 Stock Redrow 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 13: Climate Action
Redrow is listed as a top 10 stock on December 14, 2023 in the market index SDG 13 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Redrow on December 14, 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° View Redrow Buy
| 360 METRICS | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 32 |
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| 360° VIEW | ||||||||
| 360° VIEW | 63 |
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ANALYSIS: With an Obermatt 360° View of 63 (better than 63% 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 of the metrics below and half above average for Redrow. The consolidated Growth Rank has a good rank of 55, 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 55% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 100 which means that the company has a financing structure that is safer than 100% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 36 which means that the share price of Redrow is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 64% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 32, which means that professional investors are more pessimistic about the stock than for 68% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Redrow is better positioned than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 55), and the company is safely financed (Safety Rank of 100). However, professional market sentiment is low(Sentiment Rank of 32). The negative market view on Redrow may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Redrow compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. 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 if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Redrow only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 32 (better than 32% compared with alternatives), overall professional sentiment and engagement for the stock Redrow is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Redrow. Analyst Opinions are at a rank of 58 (better than 58% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 54 which means that currently, professional investors hold more stock in this company than in 54% of alternative investment opportunities. But Analyst Opinions Change has a rank of 20, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Redrow. Furthermore, Market Pulse has a rank of 34, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 32 (less encouraging than 68% compared with investment alternatives), Redrow has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Redrow Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% 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 63, which means that the stock price is lower as regards to invested capital than for 63% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 66% of alternatives (only 34% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 66% 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 36, 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
Growth Strategy: Redrow Growth Momentum good
| GROWTH METRICS | December 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 62 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 25 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 50 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 77 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 55 |
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ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Redrow shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Redrow. Sales Growth has a rank of 62 which means that currently, professionals expect the company to grow more than 62% of its competitors. Capital Growth is also above 25% of competitors with a rank of 50, and Stock Returns with the rank of 77 is also an outperformance. Only Profit Growth is low with a rank of 25 which means that currently, professionals expect the company to grow its profits less than 75% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Redrow is a good growth stock. ...read more
Safety Strategy: Redrow Debt Financing Safety very solid
| SAFETY METRICS | December 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 95 |
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| REFINANCING | ||||||||
| REFINANCING | 86 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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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 86, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. Finally, Liquidity is also good at a rank of 90, which means that the company generates more profit to service its debt than 90% 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
Combined financial peformance: Redrow Top Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), Redrow (Homebuilding, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Redrow are low in value (priced high) with a consolidated Value Rank of 36 (worse than 64% of alternatives). But they show above-average growth (Growth Rank of 55) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong buy recommendation based on Redrow's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Redrow exhibits low value (Obermatt Value Rank of 36), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 55). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 100) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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