Fact based stock research
South32 (ASX:S32)

AU000000S320

How to read the free 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.

South32 stock research in summary

south32.net

ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), South32 (Diversified Metals & Mining, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of South32 are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 85) but are riskily financed (Safety Rank of 29), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on South32's financial characteristics. As the company South32's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 53) and above-average growth (Obermatt Growth Rank of 85), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 29) 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	53
Growth Rank	85
Safety Rank	29
Combined Rank	55

Country	Australia
Industry	Diversified Metals & Mining
Index	ASX 100, ASX 200, ASX 300, ASX 50, Zinc, Silver, Water Efficiency
Size class	X-Large

This stock has achievements: Top 10 Stock.

10-Oct-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.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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

Research History: South32

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	48	57	56	53
GROWTH
GROWTH	69	81	49	85
SAFETY
SAFETY	98	84	55	29
SENTIMENT
SENTIMENT	n/a	88	42	^new
360° VIEW
360° VIEW	n/a	100	38	^new

Most recent update of the stock research: 10-Oct-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better South32 is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	48	57	56	53
GROWTH
GROWTH	69	81	49	85
SAFETY
SAFETY	98	84	55	29
COMBINED
COMBINED	73	100	51	55

Last update of combined financial performance: 10-Oct-2024. Stock analysis on combined financial performance: The higher the rank of South32 the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), South32 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 below average for South32. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 71% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than 59% of comparable companies, indicating a low value concerning South32's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 32 which means that the stock price compared with what market professionals expect for future profit levels is higher than 68% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 49 is also low. Compared with invested capital, the stock price is higher than for 51% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on South32's stock price compared with the company's operational size and dividend yields. Should dividend investors pick South32? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose South32 only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	60	41	47	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	59	51	32
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	68	47	58	49
DIVIDEND YIELD
DIVIDEND YIELD	64	78	73	71
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48	57	56	53

Last update of Value Rank: 10-Oct-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of South32; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2024, South32 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 but one indicator above average for South32. Sales Growth has a value of 58 which means that currently professionals expect the company to grow more than 58% of its competitors. Profit Growth with a value of 87 and Capital Growth with a rank of 93 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 41, which means that stock returns have recently been below 59% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. South32 has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for South32, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. 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	38	28	73	58
PROFIT GROWTH
PROFIT GROWTH	7	81	34	87
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	68	93
STOCK RETURNS
STOCK RETURNS	84	83	19	41
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	69	81	49	85

Last update of Growth Rank: 10-Oct-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of South32.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company South32 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 South32 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 where two out of three are above average for South32.Leverage is at 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 55, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is at 25, meaning that the company generates less profit to service its debt than 75% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), South32 has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for South32 more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	64	66	54	56
REFINANCING
REFINANCING	70	100	49	55
LIQUIDITY
LIQUIDITY	97	42	51	25
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98	84	55	29

Last update of Safety Rank: 10-Oct-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of South32 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	64	86	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	20	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	61	23	^new
MARKET PULSE
MARKET PULSE	n/a	89	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	88	42	^new

Last update of Sentiment Rank: 10-Oct-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for South32.
Upgrade to a Premium Account to access the latest ranks.