May 18, 2023
Top 10 Stock Trinseo Sell 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: Trinseo – Top 10 Stock in SDG 14: Life Below Water
Trinseo is listed as a top 10 stock on May 18, 2023 in the market index SDG 14 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 10 (10% performer), Obermatt issues an overall sell recommendation for Trinseo on May 18, 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° Assessment Trinseo Sell
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 17 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 10 |
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ANALYSIS: With an Obermatt 360° View of 10 (better than 10% compared with alternatives), overall professional sentiment and engagement for the stock Trinseo are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Trinseo. Only the consolidated Value Rank has an attractive rank of 78, which means that the share price of Trinseo is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 78% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 15, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 17, meaning the company has a riskier financing structure than 83% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 99% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 1. ...read more
RECOMMENDATION: With a 360° View of 10, Trinseo is worse than 90% of all alternative stock investment opportunities based on the Obermatt Method. This means that Trinseo shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 78. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 15), a riskier financing structure (Safety Rank of 17), and negative market sentiment in the professional investor community (Sentiment Rank of 1). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Trinseo is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Trinseo. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Trinseo negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock Trinseo is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Trinseo. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 16 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 3, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 97% of competitors). No wonder, the Professional Investors rank is only 1, which means that professional investors hold less stock in this company than in 99% of alternative investment opportunities. Pros tend to stay away from Trinseo, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), Trinseo has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Trinseo Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% compared with alternatives) for 2023, Trinseo shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Trinseo. Price-to-Sales (P/S) is 100 which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value for Trinseo's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 69. Finally, compared with other companies in the same industry, dividend yields of Trinseo are expected to be higher than for 98% of all competitors (an Dividend Yield rank of 98). The only low rank is for expected profits with a Price-to-Profit Rank of 1, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 78, is a strong buy recommendation based on Trinseo's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Trinseo Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Trinseo 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 Trinseo. Only Capital Growth has a good rank of 100, which means that currently professionals expect the company to grow its invested capital more than 1% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 22 which means that currently professionals expect the company to grow less than 78% of its competitors. Profit Growth with a rank of 1 and Stock Returns with a rank of 3 are also low (below 97% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a SELL recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Trinseo is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Trinseo Debt Financing Safety risky
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 17 |
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ANALYSIS: With an Obermatt Safety Rank of 17 (better than 17% compared with alternatives), the company Trinseo has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Trinseo 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 Trinseo and the other two below average. Refinancing is at 100, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. But Leverage is high with a rank of 6, meaning the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. Liquidity is also on the riskier side with a rank of 6, meaning the company generates less profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 17 (worse than 83% compared with alternatives), Trinseo has a financing structure that is significantly riskier 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 Trinseo 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 a financial decision. ...read more
Combined financial peformance: Trinseo Lowest Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 18 |
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ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Trinseo (Commodity Chemicals, USA) shares have lower financial characteristics compared with similar stocks. Shares of Trinseo are a good value (attractively priced) with a consolidated Obermatt Value Rank of 78 (better than 78% of alternatives) but show below-average growth (Growth Rank of 15), and are riskily financed (Safety Rank of 17), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 18, is a sell recommendation based on Trinseo's financial characteristics. As the company Trinseo's key financial metrics exhibit good value (Obermatt Value Rank of 78) but low growth (Obermatt Growth Rank of 15) and risky financing practices (Obermatt Safety Rank of 17), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 78% of comparable companies, may indicate 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. ...read more
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