October 10, 2024
Top 10 Stock 3i Group Strong 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 Diversity Leaders in Europe
3i Group is listed as a top 10 stock on October 10, 2024 in the market index Diversity Europe because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for 3i Group on October 10, 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 Strong Buy
| 360 METRICS | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 82 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock 3i Group are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for 3i Group. The consolidated Growth Rank has a good rank of 99, 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 99% of competitors in the same industry. The consolidated Safety Rank at 51 means that the company has a financing structure that is safer than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 82, which means that professional investors are more optimistic about the stock than for 82% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 39, meaning that the share price of 3i Group is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 61% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, 3i Group is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 99), a safe financing structure (Safety Rank of 51), and positive professional market sentiment (Sentiment Rank of 82), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of 3i Group compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (99% better than peers). The value rank could be the reverse reflection of that (1%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the 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 very positive
ANALYSIS: With an Obermatt Sentiment Rank of 82 (better than 82% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock 3i Group is very positive. 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 47 (worse than 53% 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 92, 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 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 26, 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 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 82 (more positive than 82% compared with investment alternatives), 3i Group has a reputation among professional investors that is significantly higher than 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 39 (worse than 61% 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 39, 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
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% 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 69, which means that, currently, professionals expect the company to grow more than 69% of its competitors. The same is valid for Profit Growth with a value of 71 and for Capital Growth with 88. In addition, Stock Returns had an above-average rank value of 99, which means they have been higher than 99% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, 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 above-average
| SAFETY METRICS | October 10, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 75 |
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| REFINANCING | ||||||||
| REFINANCING | 5 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company 3i Group has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of 3i Group 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, 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 71, meaning the company generates more profit to service its debt than 71% 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 51 (better than 51% compared with alternatives), 3i Group has a financing structure that is safer 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 | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% 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 39 (worse than 61% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 51, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on 3i Group's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company 3i Group exhibits low value (Obermatt Value Rank of 39), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 51) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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