June 6, 2024
Top 10 Stock AECI 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: AECI – Top 10 Stock in Good Governance in Growth Markets
AECI is listed as a top 10 stock on June 06, 2024 in the market index Good Governace Growth Markets 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 81 (top 81% performer), Obermatt assesses an overall strong buy recommendation for AECI on June 06, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Specialty Chemicals |
| Index | Low Emissions, Energy Efficient, Good Governace Growth Markets, Independent Boards Growth Markets, JSE All Shares |
| 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 AECI Strong Buy
| 360 METRICS | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| SENTIMENT | ||||||||
| SENTIMENT | 49 |
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| 360° VIEW | ||||||||
| 360° VIEW | 81 |
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ANALYSIS: With an Obermatt 360° View of 81 (better than 81% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock AECI are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for AECI. The consolidated Value Rank has an attractive rank of 99, which means that the share price of AECI 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 99% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 57, 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. 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 only 49. Professional investors are more confident in 51% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 81, AECI is better positioned than 81% 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 99), above-average growth (Growth Rank of 57), and safe financing practices (Safety Rank of 52), 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 professional market sentiment is on the riskier side (Sentiment Rank of 49), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of AECI is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for AECI only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock AECI is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for AECI. Analyst Opinions are at a rank of 100 (better than 100% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 51 which means that currently, professional investors hold more stock in this company than in 51% of alternative investment opportunities. But Analyst Opinions Change has a rank of 19, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in AECI. Furthermore, Market Pulse has a rank of 25, 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 75% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), AECI has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: AECI Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 99 (better than 99% compared with alternatives) for 2024, AECI shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for AECI. Price-to-Sales is 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for AECI'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 93. Compared with other companies in the same industry, dividend yields of AECI are expected to be higher than for 88% of all competitors (a Dividend Yield rank of 88). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 99, is a buy recommendation based on AECI'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 AECI based on its detailed value metrics.
Growth Strategy: AECI Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), AECI 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 all but one indicator above average for AECI. Profit Growth has a rank of 66 which means that currently professionals expect the company to grow its profits more than 66% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 68, and Stock Returns has a rank of 57 which means that the stock returns have recently been above 57% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 21 (79% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: AECI Debt Financing Safety above-average
| SAFETY METRICS | June 6, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 28 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 32 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
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ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company AECI 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 AECI 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 AECI and the other two below average. Refinancing is at 100, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. But Leverage is high with a rank of 28, meaning the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. Liquidity is also on the riskier side with a rank of 32, meaning the company generates less profit to service its debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), AECI 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 AECI 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: AECI Top Financial Performance
| COMBINED PERFORMANCE | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), AECI (Specialty Chemicals, South Africa) shares have much better financial characteristics than comparable stocks. Shares of AECI are a good value (attractively priced) with a consolidated Value Rank of 99 (better than 99% of alternatives), show above-average growth (Growth Rank of 57), and are safely financed (Safety Rank of 52), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on AECI's financial characteristics. As the company AECI's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 99), above-average growth (Obermatt Growth Rank of 57), and indicate that the company is safely financed (Obermatt Safety Rank of 52), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of AECI. 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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