March 7, 2024
Top 10 Stock ATCO 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: ATCO – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
ATCO is listed as a top 10 stock on March 07, 2024 in the market index TSX Composite 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 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for ATCO on March 07, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Multi-Utilities |
| Index | TSX Composite |
| Size class | X-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 ATCO Strong Buy
| 360 METRICS | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| SENTIMENT | ||||||||
| SENTIMENT | 93 |
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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 ATCO are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for ATCO. The consolidated Value Rank has an attractive rank of 97, which means that the share price of ATCO 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 97% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 80. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 93. But the consolidated Growth Rank has a low rank of 33, 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. 67 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, ATCO is better positioned than 98% 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 97), secure financing practices (Safety Rank of 80), and positive market sentiment in the professional investor community (Sentiment Rank of 93). 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 33), 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 ATCO 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 ATCO very positive
ANALYSIS: With an Obermatt Sentiment Rank of 93 (better than 93% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock ATCO is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for ATCO. Analyst Opinions are at a rank of 64 (better than 64% 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 85, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 88, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 88% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 45, which means that currently, professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 93 (more positive than 93% compared with investment alternatives), ATCO has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in ATCO may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in ATCO. ...read more
Value Strategy: ATCO Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2024, ATCO shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for ATCO. Price-to-Sales is 96 which means that the stock price compared with what market professionals expect for future sales is lower than for 96% of comparable companies, indicating a good value for ATCO's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 93% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 98. Compared with other companies in the same industry, dividend yields of ATCO are expected to be higher than for 79% of all competitors (a Dividend Yield rank of 79). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on ATCO's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in ATCO based on its detailed value metrics.
Growth Strategy: ATCO Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), ATCO 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 half of the indicators below and half above average for ATCO. Capital Growth has a rank of 76, which means that currently professionals expect the company to grow its invested capital more than 28% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has only a rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Profit Growth is also low at a rank of 28. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for ATCO, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: ATCO Debt Financing Safety very solid
| SAFETY METRICS | March 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 94 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 80 |
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ANALYSIS: With an Obermatt Safety Rank of 80 (better than 80% compared with alternatives) for 2024, the company ATCO has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of ATCO 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 ATCO.Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors.Refinancing is at a rank of 94, 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 94% of its competitors. Liquidity is at 44, meaning that the company generates less profit to service its debt than 56% 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 80 (better than 80% compared with alternatives), ATCO has a financing structure that is significantly 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: ATCO Top Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), ATCO (Multi-Utilities, Canada) shares have much better financial characteristics than comparable stocks. Shares of ATCO are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives), are safely financed (Safety Rank of 80, which means low debt burdens), but show below-average growth (Growth Rank of 33). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on ATCO's financial characteristics. As the company ATCO's key financial metrics exhibit good value (Obermatt Value Rank of 97) but low growth (Obermatt Growth Rank of 33) while being safely financed (Obermatt Safety Rank of 80), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 97% 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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