May 11, 2023
Top 10 Stock Western Forest Products 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: Western Forest Products – Top 10 Stock in Wood & Timber Industry
Western 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. 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° Rank of 32 (32% performer), Obermatt assesses an overall hold recommendation for Western Forest Products on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Forest Products |
| Index | Renewables Users, Timber Industry |
| Size class | 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 Western Forest Products Hold
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 97 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° Rank of 32 (better than 32% compared with alternatives), overall professional sentiment and engagement for the stock Western Forest Products are below the industry average. The 360° Rank is based on consolidating four consolidated indicators, with half the metrics below and half above average for Western Forest Products. The consolidated Value Rank has an attractive rank of 86, which means that the share price of Western 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 86% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 97. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 1. Professional investors are more confident in 99% other stocks. The consolidated Growth Rank also has a low rank of 3, 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. 97 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° Rank of 32, Western Forest Products is worse than 68% 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 86), and the financing structure is on the safer side (Safety Rank of 97). However, sentiment in the professional investor community is below-average (Sentiment Rank of 1), as is the growth momentum for the company (Growth Rank of 3). While everybody wants to buy at low stock prices (good value), professionals’ skepticism may mean that the low price is justified. 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 Western Forest Products negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock Western Forest Products 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 Western Forest Products. Analyst Opinions are at a rank of 23 (worse than 77% 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 7 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 27, 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 73% of competitors). No wonder, the Professional Investors rank is only 6, which means that professional investors hold less stock in this company than in 94% of alternative investment opportunities. Pros tend to stay away from Western Forest Products, 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), Western Forest Products 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: Western Forest Products Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2023, Western Forest Products 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 Western Forest Products. Price Sales has a value of 85 which means that the stock price compared with what market professionals expect for future sales is lower than 85% of comparable companies, indicating a good value for Western Forest Products's revenue size. The same is valid for price-to-book capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Capital Rank of 94. Finally, compared with other companies in the same industry, dividend yields of Western Forest Products are expected to be higher than 96% of all competitors (an Obermatt Dividend Yield rank of 96). The only low rank is for expected profits with a Price-to-Profit Rank of 19, 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 86, is a strong buy recommendation based on Western Forest Products'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: Western Forest Products Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Western 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 all four metrics below average for Western Forest Products. Sales Growth has a rank of 32, which means that currently professionals expect the company to grow less than 68% of its competitors. The same is valid for Profit Growth, with a rank of 8, and Capital Growth with 48. In addition, Stock Returns have a below market rank of 5, which means that the stock returns have recently been below 95% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, 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 prospects, especially Sentiment performance, because it may be a turnaround situation that could entail above-average returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Western Forest Products Debt Financing Safety very solid
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 92 |
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| REFINANCING | ||||||||
| REFINANCING | 93 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 97 |
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ANALYSIS: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives) for 2023, the company Western Forest Products has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Western 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 Western Forest Products. Leverage is at 92, meaning the company has a below-average debt-to-equity ratio. It has less debt than 92% of its competitors. Refinancing is at a rank of 93, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. Finally, Liquidity is also good at a rank of 71, which means that the company generates more profit to service its debt than 71% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives), Western 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: Western Forest Products Top Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Western Forest Products (Forest Products, Canada) shares have much better financial characteristics than comparable stocks. Shares of Western Forest Products are a good value (attractively priced) with a consolidated Obermatt Value Rank of 86 (better than 86% of alternatives), are safely financed (Safety Rank of 97, which means low debt burdens), but show below-average growth (Growth Rank of 3). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 76, is a strong buy recommendation based on Western Forest Products's financial characteristics. As the company Western Forest Products's key financial metrics exhibit good value (Obermatt Value Rank of 86) but low growth (Obermatt Growth Rank of 3) while being safely financed (Obermatt Safety Rank of 97), it may be a safer investment because companies with low debt can better withstand times of crises. The good value, better than 86% 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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