January 11, 2024
Top 10 Stock Sumitomo 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: Sumitomo – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Sumitomo is listed as a top 10 stock on January 11, 2024 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 50 (high 50% performer), Obermatt assesses an overall buy recommendation for Sumitomo on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Trading & Distribution |
| Index | TOPIX 100, SDG 4, Nikkei 225 |
| Size class | XX-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° View Sumitomo Buy
| 360 METRICS | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sumitomo are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sumitomo. The consolidated Value Rank has an attractive rank of 86, which means that the share price of Sumitomo is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 86% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 62. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 30. Professional investors are more confident in 70% other stocks. The consolidated Growth Rank also has a low rank of 23, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 77 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, Sumitomo is better positioned than 50% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 86), and the financing structure is on the safer side (Safety Rank of 62). However, sentiment in the professional investor community is below-average (Sentiment Rank of 30), as is the growth momentum for the company (Growth Rank of 23). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Sumitomo only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock Sumitomo is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Sumitomo. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 84, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Sumitomo. But the Professional Investors rank is low at 48, which means that professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), Sumitomo has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Sumitomo Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2024, Sumitomo shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sumitomo. Price-to-Sales is 60 which means that the stock price compared with what market professionals expect for future sales is lower than for 60% of comparable companies, indicating a good value for Sumitomo's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 91% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 73. Compared with other companies in the same industry, dividend yields of Sumitomo are expected to be higher than for 84% of all competitors (a Dividend Yield rank of 84). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 86, is a buy recommendation based on Sumitomo'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 Sumitomo based on its detailed value metrics.
Growth Strategy: Sumitomo Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Sumitomo shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Sumitomo. Sales Growth has a below market rank of 19, which means that, currently, professionals expect the company to grow less than 81% of its competitors. The same is valid for Capital Growth, with a rank of 15, and Profit Growth, with a rank of 40. Currently, professionals expect the company to grow its profits less than 60% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 75, which means that the stock returns have recently been above 75% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Sumitomo, 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
Safety Strategy: Sumitomo Debt Financing Safety above-average
| SAFETY METRICS | January 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 79 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 62 |
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ANALYSIS: With an Obermatt Safety Rank of 62 (better than 62% compared with alternatives), the company Sumitomo 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 Sumitomo 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 just one indicator above average for Sumitomo and the other two below average. Refinancing is at 79, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. But Leverage is high with a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Liquidity is also on the riskier side with a rank of 38, meaning the company generates less profit to service its debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 62 (better than 62% compared with alternatives), Sumitomo has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Sumitomo are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Sumitomo Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Sumitomo (Trading & Distribution, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Sumitomo are a good value (attractively priced) with a consolidated Value Rank of 86 (better than 86% of alternatives), are safely financed (Safety Rank of 62, which means low debt burdens), but show below-average growth (Growth Rank of 23). ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Sumitomo's financial characteristics. As the company Sumitomo's key financial metrics exhibit good value (Obermatt Value Rank of 86) but low growth (Obermatt Growth Rank of 23) while being safely financed (Obermatt Safety Rank of 62), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 86% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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