May 11, 2023
Top 10 Stock RELX Hold 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: RELX – Top 10 Stock in AEX Index
RELX is listed as a top 10 stock on May 11, 2023 in the market index AEX 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 37 (37% performer), Obermatt assesses an overall hold recommendation for RELX on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Research & Consulting |
| Index | AEX, FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe, Human Rights, Renewables Users |
| 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 RELX Hold
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 4 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock RELX are below the industry average. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for RELX. The consolidated Growth Rank has a good rank of 91, 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 91% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 4, which means that the share price of RELX 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 96% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 20, which means that the company has a financing structure that is riskier than 80% 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 37, RELX is worse than 63% 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 91), and professional market sentiment is positive (Sentiment Rank of 63), 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 RELX positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock RELX is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for RELX. Analyst Opinions are at a rank of 28 (worse than 72% 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 31, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 74, which means that professional investors hold more stock in this company than in 74% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 95, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 95% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to RELX and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), RELX 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
Value Strategy: RELX Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 4 (worse than 96% compared with alternatives), RELX shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for RELX. Price-to-Sales has a value of 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning RELX's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Obermatt Price-to-Book Rank of 6, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of RELX. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 11 and Dividend Yield, which is lower than 69% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 4, is a SELL recommendation based on RELX's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for RELX? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for new and exciting products where everybody wants a piece of the action. Should you pay a lot for a hot stock such as RELX? It's risky, and even if it continues to grow because of popular demand, it will most likely return to what it's worth. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is reasonable for the company to dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. RELX may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: RELX Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2023, RELX 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 RELX. Sales Growth has a rank of 81 which means that currently, professionals expect the company to grow more than 81% of its competitors. Both Profit Growth, with a rank of 60, and Stock Returns, with a rank of 67, are also above average. But Capital Growth only has a rank of 47, which means that, currently, professionals expect the company to grow its invested capital less than 40% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a BUY recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: RELX Debt Financing Safety risky
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 30 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 63 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company RELX has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of RELX 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 just one indicator above average for RELX. Liquidity is at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 30, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 70% of its competitors. Leverage is also high at a rank of 15, which means that the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 20 (worse than 80% compared with alternatives), RELX has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: RELX Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 4 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| COMBINED | ||||||||
| COMBINED | 25 |
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ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), RELX (Research & Consulting, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RELX are low in value (priced high) with a consolidated Obermatt Value Rank of 4 (worse than 96% of alternatives), and are riskily financed (Safety Rank of 20, which means above-average debt burdens) but show above-average growth (Growth Rank of 91). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 25, is a hold recommendation based on RELX's financial characteristics. As the company RELX shows low value with an Obermatt Value Rank of 4 (96% 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 91% of comparable companies (Obermatt Growth Rank is 91). 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 20 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 RELX, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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