September 21, 2023
Top 10 Stock Sembcorp Industries 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: Sembcorp Industries – Top 10 Stock in Straits Times Index STI
Sembcorp Industries is listed as a top 10 stock on September 21, 2023 in the market index STI because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for Sembcorp Industries on September 21, 2023.
Snapshot: Obermatt Ranks
| Country | Singapore |
| Industry | Multi-Utilities |
| Index | Water Tech, STI |
| 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° View Sembcorp Industries Hold
| 360 METRICS | September 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 12 |
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| SENTIMENT | ||||||||
| SENTIMENT | 95 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sembcorp Industries are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Sembcorp Industries. 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 all other ranks are below average. The consolidated Value Rank has a rank of 39, which means that the share price of Sembcorp Industries is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 7, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 7% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 12 which means that the company has a riskier financing structure than 88% 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 26, Sembcorp Industries is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 95) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Sembcorp Industrieṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Sembcorp Industries very positive
ANALYSIS: With an Obermatt Sentiment Rank of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Sembcorp Industries is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Sembcorp Industries. Analyst Opinions are at a rank of 61 (better than 61% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 86, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Sembcorp Industries. The Professional Investors rank is 92, which means that currently, professional investors hold more stock in this company than in 92% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 67 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 67% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 95 (more positive than 95% compared with investment alternatives), Sembcorp Industries has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Sembcorp Industries stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Sembcorp Industries Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Sembcorp Industries shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Sembcorp Industries. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 62, which means that the stock price compared with what market professionals expect for future profits is lower than for 62% of comparable companies, indicating a good value concerning Sembcorp Industries's profit levels. But Price-to-Sales is 26 which means that the stock price compared with what market professionals expect for future profits is higher than for 74% of comparable companies, indicating a low value concerning Sembcorp Industries'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 29 and for dividend yield, which is lower than for 54% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Sembcorp Industries's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Sembcorp Industries is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: Sembcorp Industries Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Sembcorp Industries 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 Sembcorp Industries. Sales Growth has a below market rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors. The same is valid for Capital Growth, with a rank of 9, and Profit Growth, with a rank of 23. Currently, professionals expect the company to grow its profits less than 77% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 89, which means that the stock returns have recently been above 89% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 7, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Sembcorp Industries, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Sembcorp Industries Debt Financing Safety risky
| SAFETY METRICS | September 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 12 |
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ANALYSIS: With an Obermatt Safety Rank of 12 (better than 12% compared with alternatives), the company Sembcorp Industries 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 Sembcorp Industries 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 all three metrics below average for Sembcorp Industries. Liquidity is at 18, meaning that the company generates less profit to service its debt than 82% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 6, meaning the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. Finally, Refinancing is at a rank of 11 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 12 (worse than 88% compared with alternatives), Sembcorp Industries has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Sembcorp Industries Lowest Financial Performance
| COMBINED PERFORMANCE | September 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| COMBINED | ||||||||
| COMBINED | 10 |
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ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), Sembcorp Industries (Multi-Utilities, Singapore) shares have lower financial characteristics compared with similar stocks. Shares of Sembcorp Industries are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives), show below-average growth (Growth Rank of 7), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on Sembcorp Industries's financial characteristics. As the company Sembcorp Industries's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 39), low growth (Obermatt Growth Rank of 7), and risky financing practices (Obermatt Safety Rank of 12), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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