June 6, 2024
Top 10 Stock Cholamandalam Financial Holdings 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: Cholamandalam Financial Holdings – Top 10 Stock in Good Governance in Growth Markets
Cholamandalam Financial Holdings is listed as a top 10 stock on June 06, 2024 in the market index Good Governace Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 85 (top 85% performer), Obermatt assesses an overall strong buy recommendation for Cholamandalam Financial Holdings on June 06, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Consumer Finance |
| Index | Good Governace Growth Markets |
| Size class | 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 Cholamandalam Financial Holdings Strong Buy
| 360 METRICS | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 78 |
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| 360° VIEW | ||||||||
| 360° VIEW | 85 |
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ANALYSIS: With an Obermatt 360° View of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Cholamandalam Financial Holdings are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Cholamandalam Financial Holdings. The consolidated Growth Rank has a good rank of 97, 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 97% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 78, which means that professional investors are more optimistic about the stock than for 78% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 49, which means that the share price of Cholamandalam Financial Holdings 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 51% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 22, which means that the company has a financing structure that is riskier than those of 78% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 85, Cholamandalam Financial Holdings is better positioned than 85% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 97), and professional market sentiment is positive (Sentiment Rank of 78), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Cholamandalam Financial Holdings very positive
ANALYSIS: With an Obermatt Sentiment Rank of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Cholamandalam Financial Holdings is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cholamandalam Financial Holdings. Analyst Opinions are at a rank of 95 (better than 95% 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 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 53, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 53% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 48, which means that currently, professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 78 (more positive than 78% compared with investment alternatives), Cholamandalam Financial Holdings has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Cholamandalam Financial Holdings 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 Cholamandalam Financial Holdings. ...read more
Value Strategy: Cholamandalam Financial Holdings Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Cholamandalam Financial Holdings shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Cholamandalam Financial Holdings. Price-to-Sales (P/S) is 85, which means that the stock price compared with what market professionals expect for future sales is lower than 85% of comparable companies, indicating a good value concerning to Cholamandalam Financial Holdings's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 19, meaning that dividends are expected to be lower than for 81% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 83% of alternatives (only 17% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Cholamandalam Financial Holdings's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Cholamandalam Financial Holdings could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Cholamandalam Financial Holdings looks like an expensive investment today. ...read more
Growth Strategy: Cholamandalam Financial Holdings Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, Cholamandalam Financial Holdings shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Cholamandalam Financial Holdings. Sales Growth has a value of 92, which means that, currently, professionals expect the company to grow more than 92% of its competitors. The same is valid for Profit Growth with a value of 89 and for Capital Growth with 69. In addition, Stock Returns had an above-average rank value of 69, which means they have been higher than 69% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Cholamandalam Financial Holdings exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Cholamandalam Financial Holdings Debt Financing Safety risky
| SAFETY METRICS | June 6, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Cholamandalam Financial Holdings 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 Cholamandalam Financial Holdings 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 Cholamandalam Financial Holdings and the other two below average. Refinancing is at 65, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. But Leverage is high with a rank of 6, meaning the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. Liquidity is also on the riskier side with a rank of 38, meaning the company generates less profit to service its debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Cholamandalam Financial Holdings 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 Cholamandalam Financial Holdings 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: Cholamandalam Financial Holdings Top Financial Performance
| COMBINED PERFORMANCE | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Cholamandalam Financial Holdings (Consumer Finance, India) shares have much better financial characteristics than comparable stocks. Shares of Cholamandalam Financial Holdings are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), and are riskily financed (Safety Rank of 22, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Cholamandalam Financial Holdings's financial characteristics. As the company Cholamandalam Financial Holdings shows low value with an Obermatt Value Rank of 49 (51% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 97% of comparable companies (Obermatt Growth Rank is 97). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 22 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Cholamandalam Financial Holdings, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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