October 26, 2023
Top 10 Stock Safety Insurance 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: Safety Insurance – Top 10 Stock in Nasdaq Composite Index
Safety Insurance is listed as a top 10 stock on October 26, 2023 in the market index NASDAQ because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for Safety Insurance on October 26, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | Dividends USA, NASDAQ |
| 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 Safety Insurance Hold
| 360 METRICS | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 16 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock Safety Insurance are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Safety Insurance. Only the consolidated Value Rank has an attractive rank of 64, which means that the share price of Safety Insurance is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 64% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 15, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 37, meaning the company has a riskier financing structure than 63% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 84% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 16. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, Safety Insurance is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 64. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 15), a riskier financing structure than the competition (Safety Rank of 37), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 16) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Safety Insurance is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Safety Insurance. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Safety Insurance negative
ANALYSIS: With an Obermatt Sentiment Rank of 16 (better than 16% compared with alternatives), overall professional sentiment and engagement for the stock Safety Insurance is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Safety Insurance. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Safety Insurance. But the Professional Investors rank is low at 12, which means that professional investors hold less stock in this company than in 88% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 47, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 16 (less encouraging than 84% compared with investment alternatives), Safety Insurance has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Safety Insurance Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% compared with alternatives), Safety Insurance shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Safety Insurance. Expected dividend yields are higher than for 98% of comparable companies (a Dividend Yield rank of 98), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 61, which means that the stock price is lower compared with invested capital than for 61% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 43 which means that the stock price compared with what market professionals expect for future profits is higher than for 57% of comparable companies, indicating a low value concerning Safety Insurance's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Safety Insurance with a rank of 29. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 71% of comparable companies, indicating a low value concerning Safety Insurance's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, is a buy recommendation based on Safety Insurance's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Safety Insurance may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Safety Insurance Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Safety Insurance 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 Safety Insurance. Only Capital Growth has a good rank of 61, which means that currently professionals expect the company to grow its invested capital more than 30% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 19 which means that currently professionals expect the company to grow less than 81% of its competitors. Profit Growth with a rank of 30 and Stock Returns with a rank of 27 are also low (below 73% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Safety Insurance is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Safety Insurance Debt Financing Safety below-average
| SAFETY METRICS | October 26, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 93 |
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| REFINANCING | ||||||||
| REFINANCING | 10 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Safety Insurance has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Safety Insurance 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 two out of three indicators above average for Safety Insurance. Leverage is at a rank of 93, meaning the company has a below-average debt-to-equity ratio. It has less debt than 93% of its competitors. Liquidity is also good at a rank of 96, meaning the company generates more profit to service its debt than 96% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 10, 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 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Safety Insurance has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Safety Insurance. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Safety Insurance Lowest Financial Performance
| COMBINED PERFORMANCE | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 21 |
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ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), Safety Insurance (Property & Casualty Insurance, USA) shares have lower financial characteristics compared with similar stocks. Shares of Safety Insurance are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives) but show below-average growth (Growth Rank of 15), and are riskily financed (Safety Rank of 37), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on Safety Insurance's financial characteristics. As the company Safety Insurance's key financial metrics exhibit good value (Obermatt Value Rank of 64) but low growth (Obermatt Growth Rank of 15) and risky financing practices (Obermatt Safety Rank of 37), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 64% of comparable companies, may indicate 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. ...read more
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