November 9, 2023
Top 10 Stock Sasol 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: Sasol – Top 10 Stock in Human Rights Leaders
Sasol is listed as a top 10 stock on November 09, 2023 in the market index Human Rights because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for Sasol on November 09, 2023.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Diversified Chemicals |
| Index | Low Emissions, Energy Efficient, Good Governace Growth Markets, Human Rights, Independent Boards Growth Markets, Water Efficiency, JSE All Shares |
| 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 Sasol Buy
| 360 METRICS | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sasol are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sasol. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Sasol 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 100% of alternative stocks in the same industry. The consolidated Sentiment Rank 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 Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 38, meaning the company has a riskier financing structure than 62 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 65, Sasol is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 100) and positive market sentiment in the professional investor community (Sentiment Rank of 63), but growth expectations are below-average (Growth Rank of 17) and the financing structure is on the risky side(Safety Rank of 38). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive 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. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Sasol is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Sasol positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Sasol is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Sasol. Analyst Opinions are at a rank of 83 (better than 83% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Sasol. Finally, the Professional Investors rank is 83, which means that currently, professional investors hold more stock in this company than in 83% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Sasol has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 5, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 95% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Sasol is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Sasol Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Sasol shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sasol. Price-to-Sales is 85 which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value for Sasol's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 100% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 90. Compared with other companies in the same industry, dividend yields of Sasol are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Sasol's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Sasol based on its detailed value metrics.
Growth Strategy: Sasol Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Sasol 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 Sasol. Only Capital Growth has a good rank of 58, which means that currently professionals expect the company to grow its invested capital more than 47% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 4 which means that currently professionals expect the company to grow less than 96% of its competitors. Profit Growth with a rank of 47 and Stock Returns with a rank of 33 are also low (below 67% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, 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 Sasol 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: Sasol Debt Financing Safety below-average
| SAFETY METRICS | November 9, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 82 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 38 |
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ANALYSIS: With an Obermatt Safety Rank of 38 (better than 38% compared with alternatives), the company Sasol 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 Sasol 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 Sasol and the other two below average. Refinancing is at 82, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 82% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 24, meaning the company generates less profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 38 (worse than 62% compared with alternatives), Sasol has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Sasol are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Sasol Above-Average Financial Performance
| COMBINED PERFORMANCE | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| COMBINED | ||||||||
| COMBINED | 62 |
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ANALYSIS: With an Obermatt Combined Rank of 62 (better than 62% compared with investment alternatives), Sasol (Diversified Chemicals, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Sasol are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 38), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 62, is a buy recommendation based on Sasol's financial characteristics. As the company Sasol's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 38), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% 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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