November 21, 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 November 21, 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 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for Aqua America on November 21, 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 | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| SENTIMENT | ||||||||
| SENTIMENT | 79 |
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| 360° VIEW | ||||||||
| 360° VIEW | 95 |
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ANALYSIS: With an Obermatt 360° View of 95 (better than 95% 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 91, 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 91% of competitors in the same industry. The consolidated Safety Rank at 71 means that the company has a financing structure that is safer than 71% 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 79, which means that professional investors are more optimistic about the stock than for 79% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 31, 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 69% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, Aqua America is better positioned than 95% 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 91), a safe financing structure (Safety Rank of 71), and positive professional market sentiment (Sentiment Rank of 79), 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 (91% better than peers). The value rank could be the reverse reflection of that (9%). 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 79 (better than 79% 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 but one indicator above average for Aqua America. Analyst Opinions are at a rank of 90 (better than 90% 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 66, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Aqua America. Finally, the Professional Investors rank is 51, which means that currently, professional investors hold more stock in this company than in 51% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 79 (more positive than 79% compared with investment alternatives), Aqua America has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 48, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 52% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Aqua America is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Aqua America Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Aqua America shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Aqua America. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 61, which means that the stock price is lower compared with invested capital than for 61% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 10 which means the stock price compared with what market professionals expect for future profits is higher than 90% of comparable companies, indicating a low value concerning Aqua America's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 61 and for the dividend yields rank which is lower than for 55% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Aqua America's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Aqua America, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Aqua America Growth Momentum high
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 92 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 87 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 58 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 33 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 91 |
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ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% 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 92 which means that currently professionals expect the company to grow more than 92% of its competitors. Profit Growth with a value of 87 and Capital Growth with a rank of 58 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 33, which means that stock returns have recently been below 67% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, 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 | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 65 |
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| REFINANCING | ||||||||
| REFINANCING | 57 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 71 |
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ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% 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 all three are above average for Aqua America. Leverage is at 65, meaning the company has a below-average debt-to-equity ratio. It has less debt than 65% of its competitors. Refinancing is at a rank of 57, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Finally, Liquidity is also good at a rank of 50, which means that the company generates more profit to service its debt than 50% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 71 (better than 71% compared with alternatives), Aqua America has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Aqua America Top Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| COMBINED | ||||||||
| COMBINED | 89 |
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ANALYSIS: With an Obermatt Combined Rank of 89 (better than 89% 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 31 (worse than 69% of alternatives). But they show above-average growth (Growth Rank of 91) and are safely financed (Safety Rank of 71, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 89, 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 31), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 91). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 71) 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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