February 22, 2024
Top 10 Stock StarHub Strong Buy Recommendation

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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 StarHub Strong Buy

360 METRICS	February 22, 2024
VALUE
VALUE	45
GROWTH
GROWTH	47
SAFETY
SAFETY	71
SENTIMENT
SENTIMENT	83
360° VIEW
360° VIEW	84

ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock StarHub are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for StarHub. The consolidated Sentiment Rank has a good rank of 83, which means that professional investors are more optimistic about the stock than for 83% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 71 or better than 71% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 45, meaning that the share price of StarHub is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 47. ...read more

RECOMMENDATION: With a consolidated 360° View of 84, StarHub is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 83) and safe financing practices (Safety Rank of 71), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of StarHuḅ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for StarHub very positive

SENTIMENT METRICS	February 22, 2024
ANALYST OPINION
ANALYST OPINION	70
OPINIONS CHANGE
OPINIONS CHANGE	64
PRO HOLDINGS
PRO HOLDINGS	29
MARKET PULSE
MARKET PULSE	94
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	83

ANALYSIS: With an Obermatt Sentiment Rank of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock StarHub is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for StarHub. Analyst Opinions are at a rank of 70 (better than 70% 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 64, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 94, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 94% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 29, which means that currently, professional investors hold less stock in this company than in 71% of alternative investment opportunities. Pros tend to invest in other companies. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 83 (more positive than 83% compared with investment alternatives), StarHub has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in StarHub 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 StarHub. ...read more

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Value Strategy: StarHub Stock Price Value below-average critical

VALUE METRICS	February 22, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	59
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	45
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	5
DIVIDEND YIELD
DIVIDEND YIELD	83
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	45

ANALYSIS: With an Obermatt Value Rank of 45 (worse than 55% compared with alternatives), StarHub shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for StarHub. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value concerning StarHub's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 83, which means that dividends are expected to be higher than for 83% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 95% of alternatives (only 5% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 55% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 45, is a hold recommendation based on StarHub's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more

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Growth Strategy: StarHub Growth Momentum low

GROWTH METRICS	February 22, 2024
REVENUE GROWTH
REVENUE GROWTH	41
PROFIT GROWTH
PROFIT GROWTH	45
CAPITAL GROWTH
CAPITAL GROWTH	43
STOCK RETURNS
STOCK RETURNS	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	47

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), StarHub 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 StarHub. Sales Growth has a below market rank of 41, which means that, currently, professionals expect the company to grow less than 59% of its competitors. The same is valid for Capital Growth, with a rank of 43, and Profit Growth, with a rank of 45. Currently, professionals expect the company to grow its profits less than 55% 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 Growth Rank of 47, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for StarHub, 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

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Safety Strategy: StarHub Debt Financing Safety above-average

SAFETY METRICS	February 22, 2024
LEVERAGE
LEVERAGE	18
REFINANCING
REFINANCING	79
LIQUIDITY
LIQUIDITY	79
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	71

ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), the company StarHub has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of StarHub is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for StarHub. Refinancing is at 79, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. Liquidity is also good at 79, meaning the company generates more profit to service its debt than 79% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 18, which means the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 71 (better than 71% compared with alternatives), StarHub has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and StarHub could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more

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Combined financial peformance: StarHub Above-Average Financial Performance

COMBINED PERFORMANCE	February 22, 2024
VALUE
VALUE	45
GROWTH
GROWTH	47
SAFETY
SAFETY	79
COMBINED
COMBINED	60

ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), StarHub (Wireless Telecommunication, Singapore) shares have above-average financial characteristics compared with similar stocks. Shares of StarHub are low in value (priced high) with a consolidated Value Rank of 45 (worse than 55% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 71), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on StarHub's financial characteristics. As the company StarHub's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 45) and low growth (Obermatt Growth Rank of 47), 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. In this case, good financing practices (Obermatt Safety Rank of 71) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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