August 29, 2024
Top 10 Stock AdvanSix 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: AdvanSix – Top 10 Stock in Low Waste Leaders
AdvanSix is listed as a top 10 stock on August 29, 2024 in the market index Low Waste 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, despite a currently slow growth momentum. Based on the Obermatt 360° View of 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for AdvanSix on August 29, 2024.
Snapshot: Obermatt Ranks
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 AdvanSix Strong Buy
| 360 METRICS | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 73 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock AdvanSix are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for AdvanSix. The consolidated Value Rank has an attractive rank of 100, which means that the share price of AdvanSix 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 100% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 98. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 73. But the consolidated Growth Rank has a low rank of 15, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 85 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, AdvanSix is better positioned than 92% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 100), secure financing practices (Safety Rank of 98), and positive market sentiment in the professional investor community (Sentiment Rank of 73). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 15), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of AdvanSix is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for AdvanSix positive
ANALYSIS: With an Obermatt Sentiment Rank of 73 (better than 73% compared with alternatives), overall professional sentiment and engagement for the stock AdvanSix is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for AdvanSix. Analyst Opinions are at a rank of 84 (better than 84% 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 96, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 60, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 60% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 22, which means that currently, professional investors hold less stock in this company than in 78% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 73 (more positive than 73% compared with investment alternatives), AdvanSix has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in AdvanSix 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 AdvanSix. ...read more
Value Strategy: AdvanSix Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2024, AdvanSix shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for AdvanSix. Price-to-Sales is 90 which means that the stock price compared with what market professionals expect for future sales is lower than for 90% of comparable companies, indicating a good value for AdvanSix's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 95% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 84. Compared with other companies in the same industry, dividend yields of AdvanSix are expected to be higher than for 74% of all competitors (a Dividend Yield rank of 74). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on AdvanSix's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in AdvanSix based on its detailed value metrics.
Growth Strategy: AdvanSix Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), AdvanSix shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for AdvanSix. While Sales Growth ranks at 80, professionals currently expect the company to grow more than 80% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 14, which means that, currently, professionals expect the company to grow its profits less than 86% of its competitors, and Capital Growth has a low rank of 6. Historic stock returns were also below average with a current Stock Returns rank of 27 which means that the stock returns have recently been below 73% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: AdvanSix Debt Financing Safety very solid
| SAFETY METRICS | August 29, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 85 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2024, the company AdvanSix has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of AdvanSix 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 AdvanSix. Leverage is at a rank of 85, meaning the company has a below-average debt-to-equity ratio. It has less debt than 85% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% 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 47, 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 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), AdvanSix has a financing structure that is significantly 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 AdvanSix. 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: AdvanSix Top Financial Performance
| COMBINED PERFORMANCE | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), AdvanSix (Commodity Chemicals, USA) shares have much better financial characteristics than comparable stocks. Shares of AdvanSix are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), are safely financed (Safety Rank of 98, which means low debt burdens), but show below-average growth (Growth Rank of 15). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on AdvanSix's financial characteristics. As the company AdvanSix's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 15) while being safely financed (Obermatt Safety Rank of 98), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 100% 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
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