September 28, 2023
Top 10 Stock West African Resources 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: West African Resources – Top 10 Stock in Australian Securities Exchange Index ASX 300
West African Resources is listed as a top 10 stock on September 28, 2023 in the market index ASX 300 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 31 (31% performer), Obermatt assesses an overall hold recommendation for West African Resources on September 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 West African Resources Hold
| 360 METRICS | September 28, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 50 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 19 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 21 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 31 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 31 (better than 31% compared with alternatives), overall professional sentiment and financial characteristics for the stock West African Resources are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for West African Resources. The consolidated Value Rank has an attractive rank of 50, which means that the share price of West African Resources 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 50% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 94. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 21. Professional investors are more confident in 79% other stocks. The consolidated Growth Rank also has a low rank of 19, 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. 81 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 31, West African Resources is worse than 69% 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 50), and the financing structure is on the safer side (Safety Rank of 94). However, sentiment in the professional investor community is below-average (Sentiment Rank of 21), as is the growth momentum for the company (Growth Rank of 19). 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 West African Resources negative
ANALYSIS: With an Obermatt Sentiment Rank of 21 (better than 21% compared with alternatives), overall professional sentiment and engagement for the stock West African Resources is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for West African Resources. Analyst Opinions are at a rank of 76 (better than 76% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 21, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in West African Resources. The Professional Investors rank is also low at 36, meaning that professional investors hold less stock in this company than in 64% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 9, which means that the current professional news and professional social networks are critical of this company (more negative news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 21 (less encouraging than 79% compared with investment alternatives), West African Resources has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: West African Resources Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), West African Resources shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for West African Resources. Price-to-Profit (also referred to as price-earnings, P/E) is 85 which means that the stock price compared with what market professionals expect for future profits is lower than for 85% of comparable companies, indicating a good value concerning West African Resources's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 66, which means that the stock price is lower as regards to invested capital than for 66% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on West African Resources's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: West African Resources Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), West African Resources 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 West African Resources. Only Capital Growth has a good rank of 90, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 6 which means that currently professionals expect the company to grow less than 94% of its competitors. Profit Growth with a rank of 34 and Stock Returns with a rank of 7 are also low (below 93% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, 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 West African Resources 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: West African Resources Debt Financing Safety very solid
| SAFETY METRICS | September 28, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 94 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 59 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2023, the company West African Resources has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of West African Resources 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 West African Resources. Leverage is at 94, meaning the company has a below-average debt-to-equity ratio. It has less debt than 94% of its competitors. Refinancing is at a rank of 59, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), West African Resources 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: West African Resources Above-Average Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 50 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 19 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 98 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 54 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), West African Resources (Gold Production, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of West African Resources are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives), are safely financed (Safety Rank of 94, which means low debt burdens), but show below-average growth (Growth Rank of 19). ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on West African Resources's financial characteristics. As the company West African Resources's key financial metrics exhibit good value (Obermatt Value Rank of 50) but low growth (Obermatt Growth Rank of 19) while being safely financed (Obermatt Safety Rank of 94), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 50% 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.