May 11, 2023
Top 10 Stock Universal Forest Products 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: Universal Forest Products – Top 10 Stock in Wood & Timber Industry
Universal Forest Products 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 three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° Rank of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Universal Forest Products on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Building Products |
| Index | Timber Industry, NASDAQ |
| Size class | X-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 Universal Forest Products Strong Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 89 |
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| SENTIMENT | ||||||||
| SENTIMENT | 56 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° Rank of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Universal Forest Products are very positive. The 360° Rank is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Universal Forest Products. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Universal Forest Products 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 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 89. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 56. But the consolidated Growth Rank has a low rank of 17, which means that the company is below average in terms of growth, and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 83 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° Rank of 77, Universal Forest Products is better than 77% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 93), secure financing practices (Safety Rank of 89), and positive market sentiment in the professional investor community (Sentiment Rank of 56). 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. The company growth expectations are below the industry average (Growth Rank of 17), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good value ranking can sometimes indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Universal Forest Products is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Universal Forest Products positive
ANALYSIS: With an Obermatt Sentiment Rank of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock Universal Forest Products is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Universal Forest Products. Analyst Opinions are at a rank of 64 (better than 64% 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 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Universal Forest Products. Finally, the Professional Investors rank is 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 56 (more positive than 56% compared with investment alternatives), Universal Forest Products has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 28, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 72% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Universal Forest Products is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Universal Forest Products Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2023, Universal Forest Products shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Universal Forest Products. Price-to-Sales has a value of 76 which means that the stock price compared with what market professionals expect for future sales is lower than 76% of comparable companies, indicating a good value for Universal Forest Products's revenue size. The same is valid for expected Price-to-Profits, more favorable than 83% 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 70. Compared with other companies in the same industry, dividend yields of Universal Forest Products 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 93, is a strong buy recommendation based on Universal Forest Products'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 Universal Forest Products based on its detailed value metrics.
Growth Strategy: Universal Forest Products Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Universal Forest Products 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 Universal Forest Products. Sales Growth has a below market rank of 48, which means that, currently, professionals expect the company to grow less than 52% of its competitors. The same is valid for Capital Growth, with a rank of 25, and Profit Growth, with a rank of 18. Currently, professionals expect the company to grow its profits less than 82% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a SELL recommendation for growth and momentum investors. That picture may be the result of a company that has reached the bottom. All went south for Universal Forest Products, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder 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: Universal Forest Products Debt Financing Safety very solid
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 78 |
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| REFINANCING | ||||||||
| REFINANCING | 61 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 89 |
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ANALYSIS: With an Obermatt Safety Rank of 89 (better than 89% compared with alternatives) for 2023, the company Universal Forest Products has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Universal Forest Products 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, where all three are above average for Universal Forest Products. Leverage is at 78, meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors. Refinancing is at a rank of 61, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. Finally, Liquidity is also good at a rank of 92, which means that the company generates more profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 89 (better than 89% compared with alternatives), Universal Forest Products has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Universal Forest Products Top Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Universal Forest Products (Building Products, USA) shares have much better financial characteristics than comparable stocks. Shares of Universal Forest Products are a good value (attractively priced) with a consolidated Obermatt Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 89, which means low debt burdens), but show below-average growth (Growth Rank of 17). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 92, is a strong buy recommendation based on Universal Forest Products's financial characteristics. As the company Universal Forest Products's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 17) while being safely financed (Obermatt Safety Rank of 89), it may be a safer investment because companies with low debt can better withstand times of crises. The good value, better than 93% 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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