June 13, 2024
Top 10 Stock Ballard Power Systems 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: Ballard Power Systems – Top 10 Stock in Hydrogen Production
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Ballard Power Systems is listed as a top 10 stock on June 13, 2024 in the market index Hydrogen because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 35 (35% performer), Obermatt assesses an overall hold recommendation for Ballard Power Systems on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Electr. Components & Equipment |
| Index | Electromobility, Hydrogen, SDG 12, SDG 13, SDG 7, SDG 9, NASDAQ, TSX Composite |
| Size class | Small |
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 Ballard Power Systems Hold
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| SENTIMENT | ||||||||
| SENTIMENT | 29 |
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| 360° VIEW | ||||||||
| 360° VIEW | 35 |
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ANALYSIS: With an Obermatt 360° View of 35 (better than 35% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ballard Power Systems are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Ballard Power Systems. The consolidated Growth Rank has a good rank of 61, 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 61% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 80 which means that the company has a financing structure that is safer than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 21 which means that the share price of Ballard Power Systems is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 79% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 29, which means that professional investors are more pessimistic about the stock than for 71% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 35, Ballard Power Systems is worse than 65% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 61), and the company is safely financed (Safety Rank of 80). However, professional market sentiment is low(Sentiment Rank of 29). The negative market view on Ballard Power Systems may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Ballard Power Systems compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Ballard Power Systems only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock Ballard Power Systems is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Ballard Power Systems. Analyst Opinions are at a rank of 5 (worse than 95% 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 50 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Ballard Power Systems. Market Pulse is also positive with a rank of 54, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 54% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 3, which means that professional investors hold less stock in this company than in 97% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 29 (less encouraging than 71% compared with investment alternatives), Ballard Power Systems has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Ballard Power Systems Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Ballard Power Systems shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ballard Power Systems. Price-to-Profit (also referred to as price-earnings, P/E) is 76 which means that the stock price compared with what market professionals expect for future profits is lower than for 76% of comparable companies, indicating a good value concerning Ballard Power Systems's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 79, which means that the stock price is lower as regards to invested capital than for 79% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 85% of alternatives (only 15% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Ballard Power Systems's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Ballard Power Systems Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Ballard Power Systems 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 all but one indicator above average for Ballard Power Systems. Sales Growth has a value of 88 which means that currently professionals expect the company to grow more than 88% of its competitors. Profit Growth with a value of 56 and Capital Growth with a rank of 50 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 27, which means that stock returns have recently been below 73% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Ballard Power Systems 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 Ballard Power Systems, 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: Ballard Power Systems Debt Financing Safety very solid
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 77 |
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| REFINANCING | ||||||||
| REFINANCING | 94 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 9 |
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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 2023, the company Ballard Power Systems has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Ballard Power Systems 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 Ballard Power Systems.Leverage is at 77, meaning the company has a below-average debt-to-equity ratio. It has less debt than 77% 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 9, meaning that the company generates less profit to service its debt than 91% 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), Ballard Power Systems 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: Ballard Power Systems Below-Average Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 9 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Ballard Power Systems (Electr. Components & Equipment, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Ballard Power Systems are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives). But they show above-average growth (Growth Rank of 61) and are safely financed (Safety Rank of 80, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Ballard Power Systems's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Ballard Power Systems exhibits low value (Obermatt Value Rank of 21), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 61). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 80) 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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