February 20, 2025
Top 10 Stock AAR 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: AAR – Top 10 Stock in Dow Jones U.S. Aerospace & Defense Index
AAR is listed as a top 10 stock on February 20, 2025 in the market index D.J. US Defense 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° View of 48 (48% performer), Obermatt assesses an overall hold recommendation for AAR on February 20, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Aerospace & Defense |
| Index | SDG 12, D.J. US Defense |
| 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 AAR Hold
| 360 METRICS | February 20, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 41 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 52 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 41 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 48 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 48 (better than 48% compared with alternatives), overall professional sentiment and financial characteristics for the stock AAR are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for AAR. The consolidated Value Rank has an attractive rank of 62, which means that the share price of AAR 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 62% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 52. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 41. Professional investors are more confident in 59% other stocks. The consolidated Growth Rank also has a low rank of 41, 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. 59 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 48, AAR is worse than 52% 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 62), and the financing structure is on the safer side (Safety Rank of 52). However, sentiment in the professional investor community is below-average (Sentiment Rank of 41), as is the growth momentum for the company (Growth Rank of 41). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. 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 AAR only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock AAR is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for AAR. Analyst Opinions are at a rank of 76 (better than 76% 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 58, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 58% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 3, which means that currently, professional investors hold less stock in this company than in 97% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), AAR has a reputation among professional investors that is below that of its competitors. Not having too many professionals invested in AAR may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. 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 AAR. ...read more
Value Strategy: AAR Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 62 (better than 62% compared with alternatives), AAR shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for AAR. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value regarding AAR's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 73% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 54. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than AAR (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 62, is a buy recommendation based on AAR's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: AAR Growth Momentum low
| GROWTH METRICS | February 20, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 53 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 61 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 64 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 29 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 41 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), AAR shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for AAR. Sales Growth has a value of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Profit Growth with a value of 61 and Capital Growth with a rank of 64 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 29, which means that stock returns have recently been below 71% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. AAR 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 AAR, 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: AAR Debt Financing Safety above-average
| SAFETY METRICS | February 20, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 31 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 84 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 33 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company AAR 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 AAR 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 just one indicator above average for AAR and the other two below average. Refinancing is at 84, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 84% of its competitors. But Leverage is high with a rank of 31, meaning the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. Liquidity is also on the riskier side with a rank of 33, meaning the company generates less profit to service its debt than 67% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), AAR has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for AAR are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: AAR Below-Average Financial Performance
| COMBINED PERFORMANCE | February 20, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 41 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 33 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 45 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), AAR (Aerospace & Defense, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of AAR are a good value (attractively priced) with a consolidated Value Rank of 62 (better than 62% of alternatives), are safely financed (Safety Rank of 52, which means low debt burdens), but show below-average growth (Growth Rank of 41). ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on AAR's financial characteristics. As the company AAR's key financial metrics exhibit good value (Obermatt Value Rank of 62) but low growth (Obermatt Growth Rank of 41) while being safely financed (Obermatt Safety Rank of 52), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 62% 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.