February 15, 2024
Top 10 Stock Reliance 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: Reliance – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
Reliance is listed as a top 10 stock on February 15, 2024 in the market index CNX Nifty 50 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for Reliance on February 15, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Oil & Gas Refining |
| Index | BSE Sensex, Energy Efficient, Good Governace Growth Markets, Human Rights, Low Waste, CNX Nifty 50 |
| Size class | XX-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 Reliance Strong Buy
| 360 METRICS | February 15, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 13 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 58 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 95 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 76 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Reliance are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Reliance. The consolidated Growth Rank has a good rank of 65, 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 65% of competitors in the same industry. The consolidated Safety Rank at 58 means that the company has a financing structure that is safer than 58% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 95, which means that professional investors are more optimistic about the stock than for 95% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 13, meaning that the share price of Reliance is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 87% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, Reliance is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 65), a safe financing structure (Safety Rank of 58), and positive professional market sentiment (Sentiment Rank of 95), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of Reliance compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (65% better than peers). The value rank could be the reverse reflection of that (35%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Reliance very positive
ANALYSIS: With an Obermatt Sentiment Rank of 95 (better than 95% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Reliance is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Reliance. Analyst Opinions are at a rank of 80 (better than 80% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 95, which means that currently, professional investors hold more stock in this company than in 95% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 78 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 78% of competitors). But Analyst Opinions Change has a below-average rank of 38, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Reliance. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 95 (more positive than 95% compared with investment alternatives), Reliance has a reputation among professional investors that is significantly higher than that of its competitors. This is an early 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 might just materialize in the future. ...read more
Value Strategy: Reliance Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 13 (worse than 87% compared with alternatives), Reliance 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 Reliance. Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning Reliance's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 28, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Reliance. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 23 and Dividend Yield, which is lower than 86% 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 13, is a sell recommendation based on Reliance's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Reliance? 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 companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Reliance? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. 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 justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Reliance 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: Reliance Growth Momentum good
| GROWTH METRICS | February 15, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 58 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 59 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 37 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 75 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 65 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Reliance 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 Reliance. Sales Growth has a rank of 58 which means that currently, professionals expect the company to grow more than 58% of its competitors. Both Profit Growth, with a rank of 59, and Stock Returns, with a rank of 75, are also above average. But Capital Growth only has a rank of 37, which means that, currently, professionals expect the company to grow its invested capital less than 63% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, 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: Reliance Debt Financing Safety above-average
| SAFETY METRICS | February 15, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 63 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 31 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Reliance has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Reliance 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, with just one indicator above average for Reliance and the other two below average. Leverage is at a rank of 63 meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors.Refinancing is at a rank of 31, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 69% of its competitors. Liquidity is at a rank of 41, meaning that the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 58 (better than 58% compared with alternatives), Reliance has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Reliance are on the safer side. ...read more
Combined financial peformance: Reliance Below-Average Financial Performance
| COMBINED PERFORMANCE | February 15, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 13 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 41 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 32 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Reliance (Oil & Gas Refining, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Reliance are low in value (priced high) with a consolidated Value Rank of 13 (worse than 87% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 58, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Reliance's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Reliance exhibits low value (Obermatt Value Rank of 13), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 58) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.