August 10, 2023
Top 10 Stock Alstom Sell 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: Alstom – Top 10 Stock in Cotation Assistée en Continu Index CAC 40
Alstom is listed as a top 10 stock on August 10, 2023 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 15 (15% performer), Obermatt issues an overall sell recommendation for Alstom on August 10, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Heavy Machinery |
| Index | CAC 40, CAC All, SBF 120, Human Rights |
| Size class | XX-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 Alstom Sell
| 360 METRICS | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 11 |
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| SENTIMENT | ||||||||
| SENTIMENT | 7 |
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| 360° VIEW | ||||||||
| 360° VIEW | 15 |
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ANALYSIS: With an Obermatt 360° View of 15 (better than 15% compared with alternatives), overall professional sentiment and financial characteristics for the stock Alstom are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Alstom. The consolidated Growth Rank has a good rank of 75, 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. It ranks higher than 75% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 49 means that the share price of Alstom is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 51% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 11, which means that the company has a riskier financing structure than 89% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 7, indicating professional investors are more pessimistic about the stock than for 93% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 15, Alstom is worse than 85% of all alternative stock investment opportunities based on the Obermatt Method. This means that Alstom shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 75), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 7), the company is rather risky when it comes to financing (Safety Rank of 11). The negative market view on Alstom may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Alstom compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Alstom negative
ANALYSIS: With an Obermatt Sentiment Rank of 7 (better than 7% compared with alternatives), overall professional sentiment and engagement for the stock Alstom is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Alstom. Analyst Opinions are at a rank of 45 (worse than 55% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 26 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 21, 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 79% of competitors). No wonder, the Professional Investors rank is only 37, which means that professional investors hold less stock in this company than in 63% of alternative investment opportunities. Pros tend to stay away from Alstom, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 7 (less encouraging than 93% compared with investment alternatives), Alstom has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Alstom Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Alstom shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Alstom. Price-to-Sales (P/S) is 74, which means that the stock price compared with what market professionals expect for future sales is lower than for 74% of comparable companies, indicating a good value concerning Alstom's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 85% of alternatives (15% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 21 are lower than average (dividends are expected to be lower than 79% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 39, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Alstom's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Alstom may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Alstom Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2023, Alstom 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 but one indicator above average for Alstom. Sales Growth has a value of 58 which means that currently professionals expect the company to grow more than 58% of its competitors. Profit Growth with a value of 82 and Capital Growth with a rank of 72 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 49, which means that stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. Alstom 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 Alstom, 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: Alstom Debt Financing Safety risky
| SAFETY METRICS | August 10, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 56 |
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| REFINANCING | ||||||||
| REFINANCING | 1 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
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ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company Alstom has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Alstom 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 Alstom and the other two below average. Leverage is at a rank of 56 meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 1, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 99% of its competitors. Liquidity is at a rank of 18, meaning that the company generates less profit to service its debt than 82% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Alstom has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Alstom are on the safer side. ...read more
Combined financial peformance: Alstom Below-Average Financial Performance
| COMBINED PERFORMANCE | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 75 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| COMBINED | ||||||||
| COMBINED | 33 |
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ANALYSIS: With an Obermatt Combined Rank of 33 (worse than 67% compared with investment alternatives), Alstom (Heavy Machinery, France) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alstom are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), and are riskily financed (Safety Rank of 11, which means above-average debt burdens) but show above-average growth (Growth Rank of 75). ...read more
RECOMMENDATION: A Combined Rank of 33, is a hold recommendation based on Alstom's financial characteristics. As the company Alstom shows low value with an Obermatt Value Rank of 49 (51% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 75% of comparable companies (Obermatt Growth Rank is 75). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 11 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Alstom, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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