May 25, 2023
Top 10 Stock XL Axiata 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: XL Axiata – Top 10 Stock in Jakarta Composite Index IDX Composite
XL Axiata is listed as a top 10 stock on May 25, 2023 in the market index IDX Composite 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. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for XL Axiata on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | Indonesia |
| Industry | Wireless Telecommunication |
| Index | Artificial Intelligence, IDX Composite |
| 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 XL Axiata Buy
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| SENTIMENT | ||||||||
| SENTIMENT | 82 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock XL Axiata are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for XL Axiata. The consolidated Value Rank has an attractive rank of 60, which means that the share price of XL Axiata 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 60% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 74, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 82. But the company’s financing is risky with a Safety rank of 10. This means 90% of comparable companies have a safer financing structure than XL Axiata. ...read more
RECOMMENDATION: With a 360° View of 65, XL Axiata is better than 65% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 60), above-average growth (Growth Rank of 74), and positive market sentiment in the professional investor community (Sentiment Rank of 82), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 10), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of XL Axiata is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for XL Axiata very positive
ANALYSIS: With an Obermatt Sentiment Rank of 82 (better than 82% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock XL Axiata is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for XL Axiata. Analyst Opinions are at a rank of 89 (better than 89% 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 currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 79, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 79% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 39, which means that currently, professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 82 (more positive than 82% compared with investment alternatives), XL Axiata has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in XL Axiata may be less of an issue, especially if the stock is from a smaller company. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in XL Axiata. ...read more
Value Strategy: XL Axiata Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 60 (better than 60% compared with alternatives), XL Axiata shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for XL Axiata. Price-to-Sales (P/S) is 73, which means that the stock price compared with what market professionals expect for future sales is lower than for 73% of comparable companies, indicating a good value concerning XL Axiata's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 83% of alternatives (17% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 36 are lower than average (dividends are expected to be lower than 64% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 35, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 60, is a BUY recommendation based on XL Axiata's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for XL Axiata may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: XL Axiata Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 74 (better than 74% compared with alternatives), XL Axiata 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, with all but one indicator above average for XL Axiata. Sales Growth has a value of 61 which means that currently professionals expect the company to grow more than 61% of its competitors. Profit Growth with a value of 70 and Capital Growth with a rank of 76 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 17, which means that stock returns have recently been below 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 74, is a BUY recommendation for growth and momentum investors. XL Axiata has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for XL Axiata, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: XL Axiata Debt Financing Safety risky
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 31 |
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| REFINANCING | ||||||||
| REFINANCING | 8 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 23 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 10 |
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ANALYSIS: With an Obermatt Safety Rank of 10 (better than 10% compared with alternatives), the company XL Axiata 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 XL Axiata 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 all three metrics below average for XL Axiata. Liquidity is at 23, meaning that the company generates less profit to service its debt than 77% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 31, meaning the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. Finally, Refinancing is at a rank of 8 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 92% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 10 (worse than 90% compared with alternatives), XL Axiata has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: XL Axiata Below-Average Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), XL Axiata (Wireless Telecommunication, Indonesia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of XL Axiata are a good value (attractively priced) with a consolidated Obermatt Value Rank of 60 (better than 60% of alternatives), show above-average growth (Growth Rank of 74) but are riskily financed (Safety Rank of 10), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 44, is a hold recommendation based on XL Axiata's financial characteristics. As the company XL Axiata's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 60) and above-average growth (Obermatt Growth Rank of 74), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 10) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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