May 11, 2023
Top 10 Stock Stella-Jones Strong 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: Stella-Jones – Top 10 Stock in Wood & Timber Industry
Stella-Jones is listed as a top 10 stock on May 11, 2023 in the market index Timber Industry because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° Rank of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Stella-Jones on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Forest Products |
| Index | Timber Industry, TSX Composite |
| Size class | 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 Stella-Jones Strong Buy
| 360 METRICS | May 11, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 63 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 59 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 100 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 98 |
|
||||||
ANALYSIS: With an Obermatt 360° Rank of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Stella-Jones are very positive. The 360° Rank is based on consolidating four consolidated indicators, with all four indicators above average for Stella-Jones. The consolidated Value Rank has an attractive rank of 63, which means that the share price of Stella-Jones is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 63% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, 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. The company is also safely financed with a Safety rank of 59. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 100. ...read more
RECOMMENDATION: With a 360° Rank of 98, Stella-Jones is better than 98% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 63), above-average growth (Growth Rank of 61), an indication that the company is safely financed (Safety Rank of 59) and positive market sentiment in the professional investor community (Sentiment Rank of 100), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Stella-Jones is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Stella-Jones very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Stella-Jones is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Stella-Jones. Analyst Opinions are at a rank of 51 (better than 51% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 81, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Stella-Jones. The Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 87 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 87% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Stella-Jones has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Stella-Jones stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Stella-Jones Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Stella-Jones shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Stella-Jones. Price-to-Sales has a value of 52 which means that the stock price compared with what market professionals expect for future sales is lower than 52% of comparable companies, indicating a good value for Stella-Jones's revenue size. The same is valid for expected Price-to-Profits, more favorable than 64% of alternatives, and it is also true for the Price-to-Book capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Capital Rank of 53. Compared with other companies in the same industry, dividend yields of Stella-Jones are expected to be higher than 67% of all competitors (an Obermatt Dividend Yield rank of 67). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a BUY recommendation based on Stella-Jones's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Stella-Jones based on its detailed value metrics.
Growth Strategy: Stella-Jones Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Stella-Jones shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Stella-Jones. Profit Growth has a rank of 63, which means that currently professionals expect the company to grow its profits more than 63% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 97 (above 97% of alternative investments). But Sales Growth has a below the median rank of 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors, and Capital Growth also has a lower rank of 23. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a BUY recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Stella-Jones. ...read more
Safety Strategy: Stella-Jones Debt Financing Safety above-average
| SAFETY METRICS | May 11, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 44 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 71 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 59 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), the company Stella-Jones 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 Stella-Jones 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 Stella-Jones. Refinancing is at 71, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Liquidity is also good at 50, meaning the company generates more profit to service its debt than 50% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 44, which means the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), Stella-Jones 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 Stella-Jones 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
Combined financial peformance: Stella-Jones Top Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 63 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 50 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 80 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Stella-Jones (Forest Products, Canada) shares have much better financial characteristics than comparable stocks. Shares of Stella-Jones are a good value (attractively priced) with a consolidated Obermatt Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 61), and are safely financed (Safety Rank of 59), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 80, is a strong buy recommendation based on Stella-Jones's financial characteristics. As the company Stella-Jones's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 63), above-average growth (Obermatt Growth Rank of 61), and indicate that the company is safely financed (Obermatt Safety Rank of 59), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clear in the future. We recommend evaluating the future of Stella-Jones. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.