January 4, 2024
Top 10 Stock XL Axiata 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: XL Axiata – Top 10 Stock in Jakarta Composite Index IDX Composite
XL Axiata is listed as a top 10 stock on January 04, 2024 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 40 (40% performer), Obermatt assesses an overall hold recommendation for XL Axiata on January 04, 2024.
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° View XL Axiata Hold
| 360 METRICS | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 11 |
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| SENTIMENT | ||||||||
| SENTIMENT | 56 |
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| 360° VIEW | ||||||||
| 360° VIEW | 40 |
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ANALYSIS: With an Obermatt 360° View of 40 (better than 40% compared with alternatives), overall professional sentiment and financial characteristics for the stock XL Axiata are below the industry 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 58, which means that the share price of XL Axiata 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 58% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, 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 56. But the company’s financing is risky with a Safety rank of 11. This means 89% of comparable companies have a safer financing structure than XL Axiata. ...read more
RECOMMENDATION: With a consolidated 360° View of 40, XL Axiata is worse than 60% 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 58), above-average growth (Growth Rank of 61), 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, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 11), 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 positive
ANALYSIS: With an Obermatt Sentiment Rank of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock XL Axiata is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for XL Axiata. Analyst Opinions are at a rank of 77 (better than 77% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 87, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 87% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 20, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in XL Axiata. There are also only so many institutional investors holding company stock with a Professional Investors rank of 34, which means that, currently, professional investors hold less stock in this company than in 66% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 56 (more positive than 56% compared with investment alternatives), XL Axiata has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: XL Axiata Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% 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 82, which means that the stock price compared with what market professionals expect for future sales is lower than for 82% 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 75% of alternatives (25% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 45 are lower than average (dividends are expected to be lower than 55% 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 38, 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 58, 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 61 (better than 61% 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 half of the indicators below and half above average for XL Axiata. Sales Growth has a rank of 61, which means that, currently, professionals expect the company to grow more than 61% of its competitors. Profit Growth with a rank of 62 is also above average. But Capital Growth has only a rank of 36, and Stock Returns with 41 are also below-average. Stock returns for XL Axiata have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for XL Axiata. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: XL Axiata Debt Financing Safety risky
| SAFETY METRICS | January 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 32 |
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| REFINANCING | ||||||||
| REFINANCING | 9 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 22 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
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ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% 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 22, meaning that the company generates less profit to service its debt than 78% 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 32, meaning the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. Finally, Refinancing is at a rank of 9 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 91% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% 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.
Combined financial peformance: XL Axiata Below-Average Financial Performance
| COMBINED PERFORMANCE | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% 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 Value Rank of 58 (better than 58% of alternatives), show above-average growth (Growth Rank of 61) but are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 32, 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 58) and above-average growth (Obermatt Growth Rank of 61), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 11) 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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