August 29, 2024
Top 10 Stock Cipla 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: Cipla – Top 10 Stock in Low Waste Leaders
Cipla is listed as a top 10 stock on August 29, 2024 in the market index Low Waste 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 71 (high 71% performer), Obermatt assesses an overall buy recommendation for Cipla on August 29, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Pharmaceuticals |
| Index | Low Emissions, Good Governace Growth Markets, Human Rights, Low Waste, Recycling, CNX Nifty 50 |
| 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 Cipla Buy
| 360 METRICS | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| SENTIMENT | ||||||||
| SENTIMENT | 55 |
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| 360° VIEW | ||||||||
| 360° VIEW | 71 |
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ANALYSIS: With an Obermatt 360° View of 71 (better than 71% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cipla are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Cipla. The consolidated Value Rank has an attractive rank of 63, which means that the share price of Cipla 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 63% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 92. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 55. But the consolidated Growth Rank has a low rank of 29, 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. 71 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 71, Cipla is better positioned than 71% 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 63), secure financing practices (Safety Rank of 92), and positive market sentiment in the professional investor community (Sentiment Rank of 55). 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 29), 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 Cipla 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 Cipla positive
ANALYSIS: With an Obermatt Sentiment Rank of 55 (better than 55% compared with alternatives), overall professional sentiment and engagement for the stock Cipla is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Cipla. Analyst Opinions are at a rank of 43 (worse than 57% 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 means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Cipla. Market Pulse is also positive with a rank of 60, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 60% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 47, which means that professional investors hold less stock in this company than in 53% 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 55 (more positive than 55% compared with investment alternatives), Cipla has a reputation among professional investors that is above-average compared with 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: Cipla Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Cipla shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Cipla. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value regarding Cipla's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 69% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 57. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 42% of all competitors have even lower dividend yields than Cipla (a Dividend Yield Rank of 42). 58% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on Cipla's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Cipla Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Cipla 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 three out of four indicators below average for Cipla. Sales Growth has a below market rank of 36, which means that, currently, professionals expect the company to grow less than 64% of its competitors. The same is valid for Capital Growth, with a rank of 37, and Profit Growth, with a rank of 28. Currently, professionals expect the company to grow its profits less than 72% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 61, which means that the stock returns have recently been above 61% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Cipla, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Cipla Debt Financing Safety very solid
| SAFETY METRICS | August 29, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 81 |
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| REFINANCING | ||||||||
| REFINANCING | 70 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
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ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2024, the company Cipla has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cipla 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 all three are above average for Cipla. Leverage is at 81, meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors. Refinancing is at a rank of 70, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), Cipla has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Cipla Top Financial Performance
| COMBINED PERFORMANCE | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 75 |
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ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), Cipla (Pharmaceuticals, India) shares have much better financial characteristics than comparable stocks. Shares of Cipla are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), are safely financed (Safety Rank of 92, which means low debt burdens), but show below-average growth (Growth Rank of 29). ...read more
RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on Cipla's financial characteristics. As the company Cipla's key financial metrics exhibit good value (Obermatt Value Rank of 63) but low growth (Obermatt Growth Rank of 29) while being safely financed (Obermatt Safety Rank of 92), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 63% 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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