May 11, 2023
Top 10 Stock Vedanta Sell 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: Vedanta – Top 10 Stock in Silver Mining and Production
Vedanta is listed as a top 10 stock on May 11, 2023 in the market index Silver 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, providing mixed investment signals. Based on the Obermatt 360° Rank of 21 (21% performer), Obermatt issues an overall sell recommendation for Vedanta on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Diversified Metals & Mining |
| Index | Low Emissions, Copper, Energy Efficient, Good Governace Growth Markets, Iron, Lithium, Low Waste, Zinc, Rare Earth, Recycling, Silver, Uranium, Water Efficiency |
| 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° Assessment Vedanta Sell
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| SENTIMENT | ||||||||
| SENTIMENT | 48 |
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| 360° VIEW | ||||||||
| 360° VIEW | 21 |
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ANALYSIS: With an Obermatt 360° Rank of 21 (better than 21% compared with alternatives), overall professional sentiment and engagement for the stock Vedanta are critical, mostly below average. The 360° Rank is based on consolidating four consolidated indicators, with three out of four indicators below average for Vedanta. Only the consolidated Value Rank has an attractive rank of 69, which means that the share price of Vedanta is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 69% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 31, 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 8, meaning the company has a riskier financing structure than 92% 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 52% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 48. ...read more
RECOMMENDATION: With a 360° Rank of 21, Vedanta is worse than 79% of all alternative stock investment opportunities based on the Obermatt Method. This means that Vedanta shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 69. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 31), a riskier financing structure (Safety Rank of 8), and negative market sentiment in the professional investor community (Sentiment Rank of 48). 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 Vedanta 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 Vedanta. Only invest if you have solid reasons to believe that the sluggish 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 Vedanta only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Vedanta is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Vedanta. Analyst Opinions are at a rank of 36 (worse than 64% 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 66, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Vedanta. More encouragingly, the Professional Investors rank is 82, which means that professional investors hold more stock in this company than in 82% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 11, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 89% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 48 (less encouraging than 52% compared with investment alternatives), Vedanta has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Vedanta. While analysts and the news channels are negative, there is a change in what stock research analysts think. Above-average institutional investors in this company support them. While the sentiment signals remain mixed with analysts and news channels pessimistic, some analysts are optimistic, which is an encouraging sign for investing in this stock. ...read more
Value Strategy: Vedanta Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Vedanta shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Vedanta. Price-to-Sales (P/S) has a value of 69, which means that the stock price compared with what market professionals expect for future sales is lower than 69% of comparable companies, indicating a good value concerning Vedanta's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than 66% of alternatives. Finally, it is true for expected dividend yields with an Obermatt Dividend Yield rank of 98 (dividends are expected to be higher than 98% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 52% of all competitors have an even higher price compared with book capital which puts the Obermatt Price-to-Capital Rank for Vedanta to 48. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a BUY recommendation based on Vedanta's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Vedanta Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Vedanta shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Vedanta. Sales Growth has a below market rank of 38, which means that, currently, professionals expect the company to grow less than 62% of its competitors. The same is valid for Capital Growth, with a rank of 42, and Profit Growth, with a rank of 19. Currently, professionals expect the company to grow its profits less than 81% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 57, which means that the stock returns have recently been above 57% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a HOLD recommendation for growth and momentum investors. That picture may be the result of a company that has reached the bottom. All went south for Vedanta, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder 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: Vedanta Debt Financing Safety risky
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 8 |
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ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Vedanta 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 Vedanta 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 Vedanta. Liquidity is at 34, meaning that the company generates less profit to service its debt than 66% 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 20, meaning the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. Finally, Refinancing is at a rank of 17 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 83% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 8 (worse than 92% compared with alternatives), Vedanta 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. ...read more
Combined financial peformance: Vedanta Lowest Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 24 |
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ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Vedanta (Diversified Metals & Mining, India) shares have lower financial characteristics compared with similar stocks. Shares of Vedanta are a good value (attractively priced) with a consolidated Obermatt Value Rank of 69 (better than 69% of alternatives) but show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 24, is a sell recommendation based on Vedanta's financial characteristics. As the company Vedanta's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 31) and risky financing practices (Obermatt Safety Rank of 8), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 69% 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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