September 19, 2024
Top 10 Stock Avnet 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: Avnet – Top 10 Stock in S&P Mid-Cap Index
Avnet is listed as a top 10 stock on September 19, 2024 in the market index S&P MIDCAP because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Avnet on September 19, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Technology Distributors |
| Index | Dividends USA, NASDAQ, S&P MIDCAP |
| Size class | XX-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 Avnet Buy
| 360 METRICS | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock Avnet are above average. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Avnet. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Avnet is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 100% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 51, 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. The company is also safely financed with a Safety rank of 55. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 61. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Avnet is better positioned than 72% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 100), above-average growth (Growth Rank of 51), safe financing practices (Safety Rank of 55), and a positive market sentiment in the professional investor community (Sentiment Rank of 61), 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, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Avnet is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Avnet positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Avnet is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Avnet. Analyst Opinions are at a rank of 1 (worse than 99% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 72, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Avnet. Even better, the Professional Investors rank is 85, meaning that professional investors hold more stock in this company than in 85% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Avnet has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Avnet Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2024, Avnet shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Avnet. Price-to-Sales is 93 which means that the stock price compared with what market professionals expect for future sales is lower than for 93% of comparable companies, indicating a good value for Avnet's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 87% 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 86. Compared with other companies in the same industry, dividend yields of Avnet are expected to be higher than for 97% of all competitors (a Dividend Yield rank of 97). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Avnet'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 Avnet based on its detailed value metrics.
Growth Strategy: Avnet Growth Momentum good
| GROWTH METRICS | September 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 58 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 23 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 81 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 41 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 51 |
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ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Avnet shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Avnet. Sales Growth has a rank of 58 which means that currently, professionals expect the company to grow more than 58% of its competitors. Capital Growth is also above 23% of competitors with a rank of 81. But Profit Growth only has a rank of 23, which means that currently professionals expect the company to grow its profits less than 77% of its competitors. And Stock Returns have also been below average with a rank of only 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Avnet Debt Financing Safety above-average
| SAFETY METRICS | September 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 99 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 31 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 55 |
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ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Avnet 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 Avnet 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, with just one indicator above average for Avnet and the other two below average. Refinancing is at 99, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 99% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 31, meaning the company generates less profit to service its debt than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Avnet has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Avnet are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Avnet Above-Average Financial Performance
| COMBINED PERFORMANCE | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Avnet (Technology Distributors, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Avnet are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), show above-average growth (Growth Rank of 51), and are safely financed (Safety Rank of 55), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Avnet's financial characteristics. As the company Avnet's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 100), above-average growth (Obermatt Growth Rank of 51), and indicate that the company is safely financed (Obermatt Safety Rank of 55), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Avnet. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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