August 1, 2024
Top 10 Stock Aristocrat 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: Aristocrat – Top 10 Stock in Australian Securities Exchange Index ASX 100
Aristocrat is listed as a top 10 stock on August 01, 2024 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Aristocrat on August 01, 2024.
Snapshot: Obermatt Ranks
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 Aristocrat Hold
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Aristocrat are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Aristocrat. The consolidated Sentiment Rank has a good rank of 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 11, which means that the share price of Aristocrat is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 41, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 41% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 42 which means that the company has a riskier financing structure than 58% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 37, Aristocrat is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 90) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Aristocraṭ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Aristocrat very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Aristocrat is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Aristocrat. Analyst Opinions are at a rank of 78 (better than 78% 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 55, 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 Aristocrat. The Professional Investors rank is 92, which means that currently, professional investors hold more stock in this company than in 92% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 80 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 80% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Aristocrat 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 Aristocrat 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: Aristocrat Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Aristocrat 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 Aristocrat. Price-to-Sales is 12 which means that the stock price compared with what market professionals expect for future profits is higher than 88% of comparable companies, indicating a low value concerning Aristocrat's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 8, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Aristocrat. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 34 and Dividend Yield, which is lower than 58% 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 11, is a sell recommendation based on Aristocrat's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Aristocrat? 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 Aristocrat? 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. Aristocrat 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: Aristocrat Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Aristocrat shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Aristocrat. Sales Growth has a below market rank of 49, which means that, currently, professionals expect the company to grow less than 51% of its competitors. The same is valid for Capital Growth, with a rank of 10, and Profit Growth, with a rank of 42. Currently, professionals expect the company to grow its profits less than 58% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 91, which means that the stock returns have recently been above 91% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Aristocrat, 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: Aristocrat Debt Financing Safety below-average
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 49 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 42 |
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ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company Aristocrat 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 Aristocrat 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 Aristocrat and the other two below average. Leverage is at a rank of 52 meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors.Refinancing is at a rank of 49, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 51% of its competitors. Liquidity is at a rank of 46, meaning that the company generates less profit to service its debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), Aristocrat has a financing structure that is 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 Aristocrat are on the safer side. ...read more
Combined financial peformance: Aristocrat Lowest Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Aristocrat (Casinos & Gaming, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Aristocrat are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), show below-average growth (Growth Rank of 41), and are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Aristocrat's financial characteristics. As the company Aristocrat's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 11), low growth (Obermatt Growth Rank of 41), and risky financing practices (Obermatt Safety Rank of 42), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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