Fact based stock research
Sotetsu Holdings (TSE:9003)

JP3316400005

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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.

Sotetsu Holdings stock research in summary

sotetsu.co.jp

ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Sotetsu Holdings (Railroads, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Sotetsu Holdings are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives), show above-average growth (Growth Rank of 89) but are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Sotetsu Holdings's financial characteristics. As the company Sotetsu Holdings's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 64) and above-average growth (Obermatt Growth Rank of 89), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 11) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	64
Growth Rank	89
Safety Rank	11
Combined Rank	61

Country	Japan
Industry	Railroads
Index
Size class	Large

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Sotetsu Holdings

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	27	49	59	64
GROWTH
GROWTH	6	29	83	89
SAFETY
SAFETY	18	14	5	11
SENTIMENT
SENTIMENT	n/a	28	73	^new
360° VIEW
360° VIEW	n/a	17	69	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Mar-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Sotetsu Holdings is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	27	49	59	64
GROWTH
GROWTH	6	29	83	89
SAFETY
SAFETY	18	14	5	11
COMBINED
COMBINED	12	20	51	61

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Sotetsu Holdings the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% compared with alternatives), Sotetsu Holdings shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Sotetsu Holdings. Price-to-Sales (P/S) is 73, which means that the stock price compared with what market professionals expect for future sales is lower than for 73% of comparable companies, indicating a good value concerning Sotetsu Holdings's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 79% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 39 (dividends are expected to be higher than for 39% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 74% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Sotetsu Holdings to 26. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, is a buy recommendation based on Sotetsu Holdings'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 low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	73	87	74	73
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	26	62	79
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	56	50	31	26
DIVIDEND YIELD
DIVIDEND YIELD	28	32	42	39
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	27	49	59	64

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Sotetsu Holdings; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2024, Sotetsu Holdings shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Sotetsu Holdings. Sales Growth has a value of 52, which means that, currently, professionals expect the company to grow more than 52% of its competitors. The same is valid for Profit Growth with a value of 88 and for Capital Growth with 57. In addition, Stock Returns had an above-average rank value of 69, which means they have been higher than 69% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Sotetsu Holdings exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	21	67	63	52
PROFIT GROWTH
PROFIT GROWTH	20	51	98	88
CAPITAL GROWTH
CAPITAL GROWTH	n/a	21	9	57
STOCK RETURNS
STOCK RETURNS	14	17	81	69
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	6	29	83	89

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Sotetsu Holdings.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company Sotetsu Holdings 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 Sotetsu Holdings 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 Sotetsu Holdings. Liquidity is at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 13, 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 87% of its competitors. Leverage is also high at a rank of 2, which means that the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Sotetsu Holdings has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	10	10	2	2
REFINANCING
REFINANCING	64	25	13	13
LIQUIDITY
LIQUIDITY	29	37	36	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	18	14	5	11

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Sotetsu Holdings and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	26	57	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	44	77	^new
MARKET PULSE
MARKET PULSE	n/a	40	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	28	73	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Sotetsu Holdings.
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