January 16, 2025
Top 10 Stock AECI 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: AECI – Top 10 Stock in Good Governance in Growth Markets
AECI is listed as a top 10 stock on January 16, 2025 in the market index Good Governace Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for AECI on January 16, 2025.
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 Hold
| 360 METRICS | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| SENTIMENT | ||||||||
| SENTIMENT | 43 |
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| 360° VIEW | ||||||||
| 360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% compared with alternatives), overall professional sentiment and financial characteristics for the stock AECI are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for AECI. Only the consolidated Value Rank has an attractive rank of 97, 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 that the stock price is lower than for 97% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 41, meaning the company has a riskier financing structure than 59% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 57% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 43. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, AECI is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 97. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 17), a riskier financing structure than the competition (Safety Rank of 41), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 43) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of AECI is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of AECI. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for AECI only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% 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 metrics below and half above average for AECI. Analyst Opinions are at a rank of 100 (better than 100% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in AECI. But Market Pulse has a low rank of 12, 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 88% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 20, which means that, currently, professional investors hold less stock in this company than in 80% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), AECI has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: AECI Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2025, 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 97% 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 91. 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 97, 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 negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), AECI 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 AECI. Sales Growth has a below market rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors. The same is valid for Capital Growth, with a rank of 23, and Profit Growth, with a rank of 38. Currently, professionals expect the company to grow its profits less than 62% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 65, which means that the stock returns have recently been above 65% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for AECI, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: AECI Debt Financing Safety below-average
| SAFETY METRICS | January 16, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 92 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 22 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 41 |
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ANALYSIS: With an Obermatt Safety Rank of 41 (better than 41% compared with alternatives), the company AECI 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 AECI 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 just one indicator above average for AECI and the other two below average. Refinancing is at 92, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 22, meaning the company generates less profit to service its debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 41 (worse than 59% compared with alternatives), AECI has a financing structure that is riskier 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), AECI (Specialty Chemicals, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of AECI are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 41), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on AECI's financial characteristics. As the company AECI's key financial metrics exhibit good value (Obermatt Value Rank of 97) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 41), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 97% of comparable companies, may indicate 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. ...read more
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