September 12, 2024
Top 10 Stock 3i Group 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: 3i Group – Top 10 Stock in FTSE 100 Index
3i Group is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 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 70 (high 70% performer), Obermatt assesses an overall buy recommendation for 3i Group on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Asset Management & Custody |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe |
| Size class | X-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 3i Group Buy
| 360 METRICS | September 12, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 47 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 97 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 47 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 52 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 70 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock 3i Group are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for 3i Group. The consolidated Growth Rank has a good rank of 97, 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 97% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 52, which means that professional investors are more optimistic about the stock than for 52% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 47, which means that the share price of 3i Group 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 53% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 47, which means that the company has a financing structure that is riskier than those of 53% 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 70, 3i Group is better positioned than 70% 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 97), and professional market sentiment is positive (Sentiment Rank of 52), 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 3i Group positive
ANALYSIS: With an Obermatt Sentiment Rank of 52 (better than 52% compared with alternatives), overall professional sentiment and engagement for the stock 3i Group is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for 3i Group. Analyst Opinions are at a rank of 49 (worse than 51% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in 3i Group. More encouragingly, the Professional Investors rank is 79, which means that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 28, 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 72% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 52 (more positive than 52% compared with investment alternatives), 3i Group has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for 3i Group. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: 3i Group Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), 3i Group shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for 3i Group. Price-to-Profit (also referred to as price-earnings, P/E) is 91 which means that the stock price compared with what market professionals expect for future profits is lower than for 91% of comparable companies, indicating a good value concerning 3i Group'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 51, which means that the stock price is lower as regards to invested capital than for 51% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 77% 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 47, is a hold recommendation based on 3i Group'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: 3i Group Growth Momentum high
| GROWTH METRICS | September 12, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 56 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 67 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 84 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 97 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, 3i Group shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for 3i Group. Sales Growth has a value of 56, which means that, currently, professionals expect the company to grow more than 56% of its competitors. The same is valid for Profit Growth with a value of 67 and for Capital Growth with 84. In addition, Stock Returns had an above-average rank value of 93, which means they have been higher than 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, 3i Group exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: 3i Group Debt Financing Safety below-average
| SAFETY METRICS | September 12, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 75 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 5 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 68 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 47 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company 3i Group 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 3i Group 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 two out of three indicators above average for 3i Group. Leverage is at a rank of 75, meaning the company has a below-average debt-to-equity ratio. It has less debt than 75% of its competitors. Liquidity is also good at a rank of 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 5, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 95% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 47 (worse than 53% compared with alternatives), 3i Group has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for 3i Group. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: 3i Group Top Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 47 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 97 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 68 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 79 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), 3i Group (Asset Management & Custody, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of 3i Group are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), and are riskily financed (Safety Rank of 47, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong buy recommendation based on 3i Group's financial characteristics. As the company 3i Group shows low value with an Obermatt Value Rank of 47 (53% 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 97% of comparable companies (Obermatt Growth Rank is 97). 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 47 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 3i Group, even a low-value company (in terms of its key financial indicators) can be a good investment. ...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.