March 7, 2024
Top 10 Stock Collins Foods 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: Collins Foods – Top 10 Stock in Australian Securities Exchange Index ASX 200
Collins Foods is listed as a top 10 stock on March 07, 2024 in the market index ASX 200 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for Collins Foods on March 07, 2024.
Snapshot: Obermatt Ranks
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 Collins Foods Buy
| 360 METRICS | March 7, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 87 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 34 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 20 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 47 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 54 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock Collins Foods are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Collins Foods. Only the consolidated Value Rank has an attractive rank of 87, which means that the share price of Collins Foods is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 87% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 34, 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. The consolidated Safety Rank has a riskier rank of 20, meaning the company has a riskier financing structure than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 53% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 47. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, Collins Foods is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 87. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 34), a riskier financing structure than the competition (Safety Rank of 20), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 47) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Collins Foods is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Collins Foods. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Collins Foods only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock Collins Foods is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Collins Foods. Analyst Opinions are at a rank of 31 (worse than 69% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 45, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 49, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 51% of competitors). On the upside, the Professional Investors rank is 79, which means that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), Collins Foods has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Collins Foods stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Collins Foods Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Collins Foods shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Collins Foods. Price-to-Sales is 71 which means that the stock price compared with what market professionals expect for future sales is lower than for 71% of comparable companies, indicating a good value for Collins Foods's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 72% 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 55. Compared with other companies in the same industry, dividend yields of Collins Foods are expected to be higher than for 78% of all competitors (a Dividend Yield rank of 78). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Collins Foods'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 Collins Foods based on its detailed value metrics.
Growth Strategy: Collins Foods Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 34 (better than 34% compared with alternatives), Collins Foods 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 all but one indicator above average for Collins Foods. Sales Growth has a rank of 53 which means that currently, professionals expect the company to grow more than 53% of its competitors. Both Profit Growth, with a rank of 57, and Stock Returns, with a rank of 65, are also above average. But Capital Growth only has a rank of 19, which means that, currently, professionals expect the company to grow its invested capital less than 81% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 34, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Collins Foods Debt Financing Safety risky
| SAFETY METRICS | March 7, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 17 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 22 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 30 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Collins Foods 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 Collins Foods 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 all three metrics below average for Collins Foods. Liquidity is at 30, meaning that the company generates less profit to service its debt than 70% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 17, meaning the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. Finally, Refinancing is at a rank of 22 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Collins Foods has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Collins Foods Above-Average Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 87 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 34 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 30 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 51 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), Collins Foods (Restaurants, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of Collins Foods are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives) but show below-average growth (Growth Rank of 34), and are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 51, is a buy recommendation based on Collins Foods's financial characteristics. As the company Collins Foods's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 34) and risky financing practices (Obermatt Safety Rank of 20), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 87% of comparable companies, may indicate 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. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.