March 14, 2024
Top 10 Stock Vector Hold 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: Vector – Top 10 Stock in New Zealand Stock Exchange Index NZSX 50
Vector is listed as a top 10 stock on March 14, 2024 in the market index NZSX 50 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for Vector on March 14, 2024.
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 Vector Hold
| 360 METRICS | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock Vector are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Vector. The consolidated Growth Rank has a good rank of 55, 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. This means that growth is higher than for 55% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 21, which means that the share price of Vector is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 79% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 37, which means that the company has a financing structure that is riskier than those of 63% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, Vector is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 55), and professional market sentiment is positive (Sentiment Rank of 63), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Vector positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Vector is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Vector. Analyst Opinions are at a rank of 44 (worse than 56% 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 32, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 75, which means that professional investors hold more stock in this company than in 75% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 80, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 80% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Vector and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Vector has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Vector Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Vector shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Vector. Expected dividend yields are higher than for 73% of comparable companies (a Dividend Yield rank of 73), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than for 91% of comparable companies, indicating a low value concerning Vector's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Vector with a rank of 29. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 71% of comparable companies, indicating a low value concerning Vector's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Vector's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Vector may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Vector Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Vector 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, where half of the indicators are below and half above average for Vector. Profit Growth, with a rank of 72 (better than 72% of its competitors), and Capital Growth, with a rank of 64, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors, and Stock Returns are at a rank of 25. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Vector Debt Financing Safety below-average
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 50 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Vector has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Vector 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 Vector and the other two below average. Refinancing is at 50, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. But Leverage is high with a rank of 47, meaning the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. Liquidity is also on the riskier side with a rank of 29, meaning the company generates less profit to service its debt than 71% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Vector has a financing structure that is 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 Vector 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: Vector Lowest Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 29 |
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| COMBINED | ||||||||
| COMBINED | 19 |
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ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Vector (Multi-Utilities, New Zealand) shares have lower financial characteristics compared with similar stocks. Shares of Vector are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives), and are riskily financed (Safety Rank of 37, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Vector's financial characteristics. As the company Vector shows low value with an Obermatt Value Rank of 21 (79% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 55% of comparable companies (Obermatt Growth Rank is 55). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 37 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Vector, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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