April 11, 2024
Top 10 Stock African Rainbow Minerals 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: African Rainbow Minerals – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
African Rainbow Minerals is listed as a top 10 stock on April 11, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for African Rainbow Minerals on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Diversified Metals & Mining |
| Index | Iron, JSE All Shares |
| Size class | Medium |
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 African Rainbow Minerals Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 93 |
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| SENTIMENT | ||||||||
| SENTIMENT | 62 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock African Rainbow Minerals are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for African Rainbow Minerals. The consolidated Value Rank has an attractive rank of 82, which means that the share price of African Rainbow Minerals is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 82% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 93. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 62. But the consolidated Growth Rank has a low rank of 48, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 52 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, African Rainbow Minerals is better positioned than 92% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 82), secure financing practices (Safety Rank of 93), and positive market sentiment in the professional investor community (Sentiment Rank of 62). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 48), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of African Rainbow Minerals is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for African Rainbow Minerals positive
ANALYSIS: With an Obermatt Sentiment Rank of 62 (better than 62% compared with alternatives), overall professional sentiment and engagement for the stock African Rainbow Minerals is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for African Rainbow Minerals. Analyst Opinions are at a rank of 76 (better than 76% 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 African Rainbow Minerals. But Market Pulse has a low rank of 47, 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 53% 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 46, which means that, currently, professional investors hold less stock in this company than in 54% 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 62 (more positive than 62% compared with investment alternatives), African Rainbow Minerals has a reputation among professional investors that is above-average compared with 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: African Rainbow Minerals Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 82 (better than 82% compared with alternatives) for 2024, African Rainbow Minerals shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for African Rainbow Minerals. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 93 which means that the stock price compared with what market professionals expect for future profits is lower than for 93% of comparable companies, indicating a good value concerning African Rainbow Minerals's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 82, and for Dividend Yield with a Dividend Yield Rank of 94. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 71% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 29). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 82, is a buy recommendation based on African Rainbow Minerals's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that African Rainbow Minerals has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing African Rainbow Minerals shares. ...read more
Growth Strategy: African Rainbow Minerals Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% compared with alternatives), African Rainbow Minerals 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 African Rainbow Minerals. While Sales Growth ranks at 98, professionals currently expect the company to grow more than 98% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 28, which means that, currently, professionals expect the company to grow its profits less than 72% of its competitors, and Capital Growth has a low rank of 29. Historic stock returns were also below average with a current Stock Returns rank of 19 which means that the stock returns have recently been below 81% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: African Rainbow Minerals Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 96 |
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| REFINANCING | ||||||||
| REFINANCING | 75 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 93 |
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ANALYSIS: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives) for 2024, the company African Rainbow Minerals has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of African Rainbow Minerals 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 African Rainbow Minerals. Leverage is at 96, meaning the company has a below-average debt-to-equity ratio. It has less debt than 96% of its competitors. Refinancing is at a rank of 75, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. Finally, Liquidity is also good at a rank of 76, which means that the company generates more profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 93 (better than 93% compared with alternatives), African Rainbow Minerals has a financing structure that is significantly 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: African Rainbow Minerals Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), African Rainbow Minerals (Diversified Metals & Mining, South Africa) shares have much better financial characteristics than comparable stocks. Shares of African Rainbow Minerals are a good value (attractively priced) with a consolidated Value Rank of 82 (better than 82% of alternatives), are safely financed (Safety Rank of 93, which means low debt burdens), but show below-average growth (Growth Rank of 48). ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on African Rainbow Minerals's financial characteristics. As the company African Rainbow Minerals's key financial metrics exhibit good value (Obermatt Value Rank of 82) but low growth (Obermatt Growth Rank of 48) while being safely financed (Obermatt Safety Rank of 93), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 82% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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