August 15, 2024
Top 10 Stock Charles Schwab Sell 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: Charles Schwab – Top 10 Stock in Dow Jones U.S. Investment Services Index
Charles Schwab is listed as a top 10 stock on August 15, 2024 in the market index D.J. US Investing because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 4 (4% performer), Obermatt issues an overall sell recommendation for Charles Schwab on August 15, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Investment Banking & Brokerage |
| Index | D.J. US Investing, S&P 500 |
| 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 Charles Schwab Sell
| 360 METRICS | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| SENTIMENT | ||||||||
| SENTIMENT | 17 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock Charles Schwab are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for Charles Schwab. The consolidated Value Rank has a low rank of 34 which means that the share price of Charles Schwab is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 66% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 48, which means that the company exhibits below-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 lower than for 48% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 6, which means that the company has a riskier financing structure than 94% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 17, which means that professional investors are more pessimistic about the stock than for 83% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, Charles Schwab is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that Charles Schwab shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 17. The negative market view on Charles Schwab may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While Charles Schwab may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for Charles Schwab negative
ANALYSIS: With an Obermatt Sentiment Rank of 17 (better than 17% compared with alternatives), overall professional sentiment and engagement for the stock Charles Schwab is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Charles Schwab. Analyst Opinions are at a rank of 71 (better than 71% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 9, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Charles Schwab. The Professional Investors rank is also low at 8, meaning that professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 41, which means that the current professional news and professional social networks are critical of this company (more negative news than for 59% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 17 (less encouraging than 83% compared with investment alternatives), Charles Schwab has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Charles Schwab Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Charles Schwab shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Charles Schwab. Price-to-Sales is 23 which means that the stock price compared with what market professionals expect for future profits is higher than 77% of comparable companies, indicating a low value concerning Charles Schwab's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 42, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Charles Schwab. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 38 and Dividend Yield, which is lower than 53% 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 34, is a hold recommendation based on Charles Schwab's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Charles Schwab? 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 Charles Schwab? 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. Charles Schwab 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: Charles Schwab Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% compared with alternatives), Charles Schwab 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 Charles Schwab. Sales Growth has a rank of 85 which means that currently, professionals expect the company to grow more than 85% of its competitors. Capital Growth is also above 6% of competitors with a rank of 90. But Profit Growth only has a rank of 6, which means that currently professionals expect the company to grow its profits less than 94% of its competitors. And Stock Returns have also been below average with a rank of only 20. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold 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: Charles Schwab Debt Financing Safety risky
| SAFETY METRICS | August 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 9 |
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| REFINANCING | ||||||||
| REFINANCING | 83 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 7 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
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ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company Charles Schwab has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Charles Schwab 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 Charles Schwab and the other two below average. Refinancing is at 83, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 83% of its competitors. But Leverage is high with a rank of 9, meaning the company has an above-average debt-to-equity ratio. It has more debt than 91% of its competitors. Liquidity is also on the riskier side with a rank of 7, meaning the company generates less profit to service its debt than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), Charles Schwab has a financing structure that is significantly riskier 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 Charles Schwab 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: Charles Schwab Lowest Financial Performance
| COMBINED PERFORMANCE | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 7 |
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| COMBINED | ||||||||
| COMBINED | 4 |
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ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Charles Schwab (Investment Banking & Brokerage, USA) shares have lower financial characteristics compared with similar stocks. Shares of Charles Schwab are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives), show below-average growth (Growth Rank of 48), and are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Charles Schwab's financial characteristics. As the company Charles Schwab's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 34), low growth (Obermatt Growth Rank of 48), and risky financing practices (Obermatt Safety Rank of 6), 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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