October 5, 2023
Top 10 Stock SPX 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: SPX – Top 10 Stock in SDG 10: Reduced Inequality
SPX is listed as a top 10 stock on October 05, 2023 in the market index SDG 10 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 71 (high 71% performer), Obermatt assesses an overall buy recommendation for SPX on October 05, 2023.
Snapshot: Obermatt Ranks
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 SPX Buy
| 360 METRICS | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| SENTIMENT | ||||||||
| SENTIMENT | 72 |
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| 360° VIEW | ||||||||
| 360° VIEW | 71 |
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ANALYSIS: With an Obermatt 360° View of 71 (better than 71% compared with alternatives), overall professional sentiment and financial characteristics for the stock SPX are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for SPX. The consolidated Growth Rank has a good rank of 91, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 91% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 72, which means that professional investors are more optimistic about the stock than for 72% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 30, which means that the share price of SPX is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 70% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 46, which means that the company has a financing structure that is riskier than those of 54% 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 71, SPX is better positioned than 71% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 91), and professional market sentiment is positive (Sentiment Rank of 72), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for SPX positive
ANALYSIS: With an Obermatt Sentiment Rank of 72 (better than 72% compared with alternatives), overall professional sentiment and engagement for the stock SPX is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SPX. Analyst Opinions are at a rank of 87 (better than 87% 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 81, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 69, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 69% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 8, which means that currently, professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 72 (more positive than 72% compared with investment alternatives), SPX has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in SPX may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in SPX. ...read more
Value Strategy: SPX Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), SPX 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 SPX. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 60, which means that the stock price compared with what market professionals expect for future profits is lower than for 60% of comparable companies, indicating a good value concerning SPX's profit levels. But Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than for 51% of comparable companies, indicating a low value concerning SPX'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 46 and for dividend yield, which is lower than for 99% 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 30, is a hold recommendation based on SPX'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 SPX 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: SPX Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2023, SPX 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 SPX. Sales Growth has a rank of 73 which means that currently, professionals expect the company to grow more than 73% of its competitors. Both Profit Growth, with a rank of 85, and Stock Returns, with a rank of 77, are also above average. But Capital Growth only has a rank of 47, which means that, currently, professionals expect the company to grow its invested capital less than 53% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: SPX Debt Financing Safety below-average
| SAFETY METRICS | October 5, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 78 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 32 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company SPX 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 SPX 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 SPX and the other two below average. Leverage is at a rank of 78 meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors.Refinancing is at a rank of 22, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 78% of its competitors. Liquidity is at a rank of 32, meaning that the company generates less profit to service its debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), SPX has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of SPX are on the safer side. ...read more
Combined financial peformance: SPX Above-Average Financial Performance
| COMBINED PERFORMANCE | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), SPX (Industrial Machinery, USA) shares have above-average financial characteristics compared with similar stocks. Shares of SPX are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives), and are riskily financed (Safety Rank of 46, which means above-average debt burdens) but show above-average growth (Growth Rank of 91). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on SPX's financial characteristics. As the company SPX shows low value with an Obermatt Value Rank of 30 (70% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 91% of comparable companies (Obermatt Growth Rank is 91). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 46 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for SPX, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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