December 28, 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 December 28, 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 4 (4% performer), Obermatt issues an overall sell recommendation for Trinseo on December 28, 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 Trinseo Sell
| 360 METRICS | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 21 |
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| SENTIMENT | ||||||||
| SENTIMENT | 10 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics 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 90, which means that the share price of Trinseo is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 90% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 1, 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 21, meaning the company has a riskier financing structure than 79% 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 90% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 10. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, Trinseo is worse than 96% 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 90. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 1), a riskier financing structure than the competition (Safety Rank of 21), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 10) is negative. 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 low 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 10 (better than 10% 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 three out of four metrics below average for Trinseo. Analyst Opinions are at a rank of 5 (worse than 95% 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 75, 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 Trinseo. But the Professional Investors rank is low at 18, which means that professional investors hold less stock in this company than in 82% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 9, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 10 (less encouraging than 90% compared with investment alternatives), Trinseo has a reputation among professional investors that is far 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: Trinseo Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 90 (better than 90% compared with alternatives) for 2023, Trinseo shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Trinseo. Price-to-Sales is 97 which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value for Trinseo'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 86. Compared with other companies in the same industry, dividend yields of Trinseo are expected to be higher than for 67% of all competitors (a Dividend Yield rank of 67). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, is a buy recommendation based on Trinseo'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 Trinseo based on its detailed value metrics.
Growth Strategy: Trinseo Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 1 (better than 1% 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 all four metrics below average for Trinseo. Sales Growth has a rank of 35, which means that currently professionals expect the company to grow less than 65% of its competitors. The same is valid for Profit Growth, with a rank of 1, and Capital Growth with 1. In addition, Stock Returns have a below market rank of 3, which means that the stock returns have recently been below 97% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 1, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Trinseo Debt Financing Safety risky
| SAFETY METRICS | December 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 21 |
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ANALYSIS: With an Obermatt Safety Rank of 21 (better than 21% 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 8, meaning the company generates less profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 21 (worse than 79% 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 an investment decision. ...read more
Combined financial peformance: Trinseo Lowest Financial Performance
| COMBINED PERFORMANCE | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 14 |
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ANALYSIS: With an Obermatt Combined Rank of 14 (worse than 86% 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 Value Rank of 90 (better than 90% of alternatives) but show below-average growth (Growth Rank of 1), and are riskily financed (Safety Rank of 21), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 14, 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 90) but low growth (Obermatt Growth Rank of 1) and risky financing practices (Obermatt Safety Rank of 21), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 90% 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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