April 11, 2024
Top 10 Stock Aqua America 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: Aqua America – Top 10 Stock in Water Technology
Aqua America is listed as a top 10 stock on April 11, 2024 in the market index Water Tech because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Aqua America on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Water Utilities |
| Index | Employee Focus US, Water Tech, S&P MIDCAP |
| 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 Aqua America Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 16 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 94 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Aqua America are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Aqua America. The consolidated Growth Rank has a good rank of 99, 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. This means that growth is higher than for 99% of competitors in the same industry. The consolidated Safety Rank at 73 means that the company has a financing structure that is safer than 73% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 16, meaning that the share price of Aqua America is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 84% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Aqua America is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 99), a safe financing structure (Safety Rank of 73), and positive professional market sentiment (Sentiment Rank of 94), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Aqua America compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (99% better than peers). The value rank could be the reverse reflection of that (1%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Aqua America very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Aqua America is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Aqua America. Analyst Opinions are at a rank of 89 (better than 89% 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 with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Aqua America. The Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 63 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 63% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Aqua America has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Aqua America stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Aqua America Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), Aqua America shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Aqua America. Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Aqua America's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 46, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Aqua America. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 22 and Dividend Yield, which is lower than 66% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on Aqua America's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Aqua America? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Aqua America? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Aqua America may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Aqua America Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, Aqua America 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 Aqua America. Sales Growth has a value of 86 which means that currently professionals expect the company to grow more than 86% of its competitors. Profit Growth with a value of 84 and Capital Growth with a rank of 77 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 44, which means that stock returns have recently been below 56% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Aqua America 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 Aqua America, 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: Aqua America Debt Financing Safety above-average
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 66 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company Aqua America 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 Aqua America 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 where two out of three are above average for Aqua America.Leverage is at 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors.Refinancing is at a rank of 69, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Liquidity is at 48, meaning that the company generates less profit to service its debt than 52% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 73 (better than 73% compared with alternatives), Aqua America has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Aqua America Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 16 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Aqua America (Water Utilities, USA) shares have much better financial characteristics than comparable stocks. Shares of Aqua America are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 73, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Aqua America's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Aqua America exhibits low value (Obermatt Value Rank of 16), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 73) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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